Short Notes on The National Savings Certificate Scheme 2019-NSC Rule 2019 | The National Savings Certificate Scheme 2019-NSC Rule 2019 MCQs/Quiz/Short Notes | IPO Exam MCQs/Quiz - Smart Vision Classes

THE NATIONAL SAVINGS CERTIFICATES (VIII ISSUE) SCHEME, 2019 (RULES 1989 ADDED)

- “Act” means The Government Savings Promotion Act, 1873 (5 of 1873)

- “General Rules” means the Government Savings Promotion General Rules, 2018

-FORM – 1-Application for opening an account

-FORM – 2-Application for closure of account

-FORM – 3-Application for pledging of account

Type of accounts:

(a) A Single Holder Type Account may be opened by an adult for himself, or on behalf of a minor or a person of unsound mind of whom he is the guardian; or by a minor who has attained the age of ten years;

(b) Joint A- Type Account may be opened jointly in the names of upto three adults payable to all the holders jointly or to the survivor or survivors.

(c)Joint B-Type Account may be opened jointly in the name of upto three adults payable to any of the account holders or to the survivor or survivors.

-An individual may open any number of accounts

Pledging of account:

(a) the President of India or the Governor of a State in his official capacity;

(b) the Reserve Bank of India or a Scheduled Bank or a Cooperative Society, including a Co-operative Bank;

(d) a local authority; or

(e) a housing finance company approved by the National Housing Bank and notified by the Central Government

-A blind or a person with physical infirmity making him incapable of operating the account may pledge his deposit through any literate individual whom he authorizes for this purpose

-If the account is prematurely closed (in extreme condition) after the expiry of one year but before the expiry of three years from the date of deposit, the premature closure shall be allowed and on such premature closure of the account interest on principal amount at the rate applicable to the Post Office Savings Account from time to time for the complete months for which the account has been held, shall be payable.

-If an account is prematurely closed under (in extreme condition) after the expiry of three years from the date of the opening, the amount payable, as per specified in the table.

-Deduction of 2% TDS in respect of cash withdrawal above RS.1crore by an account holder of National savings schemes/certificates since 01.04.2019.

- As regards the issue & discharge of NSCs/KVPs issued on or after 01.07.2016, the consolidation and vouchers of Ho & SOs should be transferred to the SBCO of the HPO concerned.

Some Changes after the SB Order 12/2020 order 14/02/2020

-Minimum amount for opening of account under this scheme: Rs.1000/- in multiple of Rs.100/-

*Type of account:

-a single holder type account: adult himself or on behalf of a minor or a person of unsound mind

-joint A type: upto three adults

-joint B type: upto three adults

*Some important fees:

-Issue of duplicate passbook: Rs.50/-

-Issue of statement of account or deposit receipt: Rs.20/- in each case

-Issue of passbook in lieu of loss and mutilated certificate: Rs.10/- per registration

-Cancellation or change of nomination-Rs.50/-

-Transfer of account-Rs.100/-

-Pledging of account-Rs.100/-

Note: GST @18% shall be charged in addition to above amount.

*Payment of maturity value:

-by the transfer to the savings bank account of the payee

-by a crossed cheque

-by cash, if the amount is below the limit prescribed in this regard under the income tax act, 1961.

-An account (certificate) which has matured but not closed, the eligible balance in the account shall continue to earn interest at the rate applicable to the post office saving account, till the closure of account.

- ‘Eligible balance’ means the amount of balance at the credit of the account, including interest accrued thereon.

*Transfer of certificate from one individual to another:

-On death of account holder

-On the order of the court

-On pledging

-On the event of the death of any of the account holders in a joint account.

NATIONAL SAVINGS CERTIFICATE (VIII Issue):

Note: Till date certificates are exists so we added study material about certificate

1.Who can purchase:

-a single holder type account: adult himself or on behalf of a minor or a person of unsound mind

-joint A type: upto three adults

-joint B type: upto three adults

-The NSC introduced from-08-05-1989

2.Maturity:

Period of maturity of a certificate is Five Years.

3.Nomination / Transferability:

-Nomination facility is available.

-Certificates can be transferred from one post office to any other post office.

-Transfer from one person to another person permissible in certain conditions.

4.Denomination / Deposit limits:

-Before 01.07.2016 NSC was in the shape of certificate of various denomination of (face value) of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000 & Rs. 10,000.

-After 01.07.2016 NSC is being in the shape of passbook; Now minimum deposit Rs.1000 in multiples of Rs.1000/-

-There is no maximum limit for purchase of the certificates.

5.Interest:

-Interest accrued on the certificates every year is liable to income tax but

deemed to have been reinvested.

6.Premature encashment:

Premature encashment of the certificate is not permissible except at a discount in the case of

-death of the holder(s),

-forfeiture by a pledge and when ordered by a court of law.

-Place of Encashment/discharge on maturity: Can be encashed/discharged at the post office where it is registered or any other post office.

7.Income Tax relief:

Income Tax rebate is available on the amount invested and interest accruing every

year under Section 80 C of Income tax Act, as amended from time to time.

👉Points to Remember for Exam Purpose

*Pledging: - Transferring Certificates (NSC & KVP) and TD accounts as Security

-Pledger - Depositor / Certificate holder

-Pledgee - Authority accepting the Pledge

-Pre-printed certificates issued before 01.07.2016: After issue of sanction by postmaster of HO, the duplicate passbook is to be issued and details of old certificates are to be entered manually in the passbook under dated signatures with designation stamp of postmaster (OM dated 28.08.2020)

-Fee for making nomination in respect of NSC/KVP-No fee.

-More than one nominee is not allowed in respect of the following denomination of NSC certificate-100/-.

*Rules governing issue of NSC at selected ‘BO’:

-Selected Bo’s are authorized to issue & discharge NSC up to Rs.100/- denomination only.

-Certificates to the value of Rs.500/- only can be issued to an individual on any single day.

-Opening of MIS/SCSS/NSC/KVP/PPF account of any amount subject to minimum/maximum limit, if any under each scheme and subsequent deposit in PPF account can be done at GDS branch post offices through cheque only (POSB cheque/Bank cheque) (OM dated 23.07.2020)

*Transfer of certificates as security is not allowed

-To an individual

-To an association

-Partnership company

*Issue Journal:

Duplicate in HO (NC-18)

Triplicate in SO (NC-18s)

-NSCs can be encashed by personally attending the post office or through messenger

-Discharge journal prepared in triplicate in SO (NC19s) and Duplicate in HO (NC-19)

-After discharge prepare advice of payment in form NC-10 in triplicate (have a look) & submit all documents to postmaster

-Pledging of certificate fees should be paid in cash which is credited in UCR

-Nomination register maintained at office of registration (HO or SO)

-HO is competent to issue Duplicate certificate (indemnity bond & bank guarantee required but there are certain exceptions)

-Stock and supply of saving certificates by circle stamp depots

-Government savings certificates Act, 1959(46 of 1959)

-A quarterly indent to meet the requirements of three months shall be submitted by the S.O to its H.O by the 15^th of May, August, November and February and by the H.O to the circle stamp Depot on 1^st of june.

-Certificates not actually required for issue to the public must be kept in the custody of the postmaster

-Postal accounts office the unclaimed certificates are preserved for a period of 30 years

-The receipt books are printed in the following three: 1000, 5000, 10000

-The 1^st class Head postmaster and superintendent of post offices will pass orders on such cases involving an amount upto Rs.500/-

*Application on behalf of minors- Father; Mother; Either parent (father or mother); Legal guardian.

- Payment for purchase of a certificate may be made by Cash, Cheque, Pay-order, Demand Draft, Matured Certificates or a duly signed Post Office Savings Bank withdrawal form together with the pass book. Procedure laid down for opening and funding of TD account shall apply to Certificates also w.e.f 1^st July 2016.

- The certificate(s) shall be issued in Passbook from w.e.f 01.07.2016.

- When certificates presented at a HO or SO are taken possession of otherwise than for immediate payment, a receipt in Form NC-11 should be granted by the HO or SO at which the certificates are tendered.

- The period of preservation of the partially used up receipt books after their surrender to the post office is 3 years.

- Issue of certificate of commission earned by authorized agent: Such certificate may be issued on charging a fee of Re. 1/- per certificate.

- “Major Head-8008-Income and Expenditure of National Small Savings Fund-03-Management Cost-103-Payment of Agency Commission to agents”.

- There are two agency systems at present with which the post offices are dealing viz. (i) SAS Agents (ii) MPKBY Agents.

-The DEA/MOF has accepted to discontinue ACG-17 taking from SAS/MPKBY agents for commission payment at the time of acceptance of business

- The guard file is bound securely in Volumes of 200 applications.

- Encashment by illiterate & Blind holders: - An illiterate or blind holder must attend the post office in person.

- The receipt of the messenger should also be obtained on the Certificate before payment, which must, at the same time, to be attested by the signature of a respectable witness known to the post office. The attestation in such cases should be in the following terms: - "The applicant is known to me and the thumb impression or mark has been taken in my presence"

- After a certificate issued before 01.07.2016 is encashed, it will be impressed with the oblong M.O. Stamp of the office on the back side.

- The Head and Sub Offices will prepare a "Journal of Certificates discharged" in the prescribed form [NC-19 and NC-19(s)] respectively.

- The journal will be prepared in duplicate in head offices.

-Memo of admission of payment: If his signature cannot be obtained, the case will be reported to the Head of the Circle for orders if the amount involved is in excess of Rs. 500/-. The 1^st class Head Postmaster and Superintendent of Post Offices will pass orders on such cases involving an amount upto Rs. 500/-.

- Procedure laid down for nomination in respect of other scheme accounts shall apply to certificates also in Finacle CBS Application except that there shall not be more than one nominee except in the case of a Certificate of the denomination of Rs.500/- or more.

- Procedure for vary or cancelation of nomination submit an application in the prescribed form (NC-53)

- Change of name of holder of a certificate: The application should be forwarded to the H.O.

*Transfer of certificates from one post office to another:

When an application for transfer of a Certificate in the prescribed Form (NC-32) is received in a Post Office working on CBS, the holder should be asked to give fresh ID as well as Address proof and Mobile number.

*Transfer of certificate from one holder to another:

A Certificate may be transferred from one person to another after the expiry of one year from the date of issue of the Certificate on the holder making an application in the prescribed form (NC-34) at the office of registration

- ‘Near relative’ means a husband, wife, lineal ascendant or descendant, brother or sister

- A Certificate purchased by a minor in his own name can be transferred to another person

- Transfer of Certificates from one person to another should be done at HO only.

- A Certificate purchased on behalf of a minor can be transferred as security only if the purchaser of the Certificate certifies that the minor is alive and the transfer is for the benefit of the minor.

- Application for transfer of Savings Certificates as security (NC-14).

*Application for the transfer of post office savings certificates as security:

-Transfer of Certificates as security to an individual, association, institution, private company, a body registered under the Indian Partnership Act, 1962 (9 of 1962) is prohibited

-A Certificate (passbook) purchased on behalf of a minor can be transferred only if the purchaser of the Certificate certifies that the minor is alive and the transfer is for the benefit of the minor.

-Certificates will not be allowed to be pledged in payment of earnest money other than standing earnest money

*NC-54(a) bond of indemnity: To be executed by the holder of certificate (s) with one surety at the time of the issue of a duplicate certificate (s) in lieu of lost, misplaced, spoilt or mutilated certificate

*NC-54(b) bond of indemnity: To be executed by the holder of certificate…………………………. with a Bank’s Guarantee at the time of the issue of a duplicate certificate (s) in lieu of lost, misplaced, spoiled or mutilated certificates

- NC-61 issue of duplicate certificate passbooks.

- From 13.5.2005 the issue of NSCs (VIII-Issue) to HUF and Trusts has been discontinued and can be issued to individuals only.

- The maturity period of the NSCs (VIII-Issue) shall be six years commencing from the date indicated on the certificate. Maturity period reduced to 5 Years from 1.12.2011.

- The investment by individuals in the NSC(VIII) issue will qualify for tax deductions under Section 80C of Income Tax 1962.

- Min.of Finance, Department of Economic Affairs has decided to replace the existing 6 years NSC(VIII-Issue) with 5 Years NSC(VIII-Issue) with effect from 1.12.2011. 10 years National Savings Certificates (IX-Issue)( Discontinued from 20.12.2015)

- There is no provision for issue of Identity Slip to the investor for these certificates.

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