NSC Tax Calculator for India
Plan your National Savings Certificate (NSC) investment with our easy-to-use NSC Calculator. Simply input your initial investment, monthly contribution, annual interest rate, and the years to retirement to find out how much interest you can earn each year. This tool is especially useful for those looking to understand their NSC investments better and to plan for retirement.
Our NSC Calculator not only helps you estimate the interest earned each year but also provides a detailed guide on how this interest affects your annual income tax. Input your initial investment, monthly contribution, annual interest rate, and years to retirement to get started.
Input Fields
- Initial Investment: The amount you initially invest in the NSC.
- Monthly Investment: Your monthly contribution to the NSC.
- Annual Interest Rate: The annual interest rate of the NSC. This is usually fixed but check current rates for accuracy.
- Years to Retirement (Tenure): The number of years you plan to keep the investment.
How to Calculate NSC Interest
The interest on NSC is compounded annually. Therefore, the formula to calculate the future value of the NSC is:
Future Value = P × (1 + r/n)nt + PMT × (((1 + r/n)nt - 1) / (r/n))
Where:
- P: Initial Investment
- r: Annual Interest Rate
- n: Number of times the interest is compounded per year
- t: Years to Retirement (Tenure)
- PMT: Monthly Investment
Bar Chart: NSC Overview [Annual Interest]
The bar chart will display the interest made each year, aiding you in visualizing your NSC investment's growth over time and underline how saving for retirement can have significant returns in the long term.
NSC Interest and Income Tax
The interest earned on your NSC investment is considered as "Income from Other Sources" for income tax purposes. You will need to report this income when filing your annual tax returns. However, the interest gets reinvested and only the final maturity amount is paid out. This re-invested interest also qualifies for deduction under Section 80C, subject to the overall limit of the section.