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National Savings Certificates (NSC) are certificates issuedby Department of post, Government of India and areavailable at all post office counters in the country

This scheme is specially designed for Governmentemployees, Businessmen and other salaried classes who areIT assesses

It is a long term safe savings option for the investor.

NSCs are issued in denominations of Rs 100, Rs 500, Rs1,000, Rs 5,000 and Rs 10,000 for a maturity period of 5years. There is no prescribed upper limit on investment.

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It is the amount charged.

Expressed as a percentage of principal, by a lender to aborrower for the use of assets.

Interest rates are typically noted on an annual basis,known as the Annual Percentage Rate (APR)

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Abasis point is a unit equal to one hundredth ofa percentage point, or one part per ten thousand,1/10000.

A basis point is defined as:

1 basis point = 1 permyriad = one-hundredth percent The basis point is commonly used for calculating

changes in interest rates, equity indexes and the yieldof a fixed-income security.

The relationship between percentage changes andbasis points can be summarized as follows: 1% change= 100 basis points, and 0.01% = 1 basis point.

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Inflation

Monetary policy

Demand and supply of funds

Risk of investments

Taxes

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Chair person Smt. Shyamala Gopinath

Members

Shri Shaktikanta Das Shri R Sridharan

Dr Rajiv Kumar

Shri Anil Bisen Shri Sudhir Shrivastava

Shri C M Bachhawat

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Post office and bank

Depositors

Public provident fund members (PPF)Senior citizens

Small investors

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The revision in interest rates follows a decision takenby government last year to link the small savingsreturns with the market rate. The new rates are

required to be announced at the beginning of afinancial year.

The decision is in line with the recommendations ofShyamala Gopinath Committee, which had suggested

that returns should be in sync with market ratesdetermined by the returns offered by other securities

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The PPF corpus is tax-free at all three stages. Theinvestment is eligible for tax deduction under Section 80C.The interest earned is also tax-free, and so are withdrawals.

The original draft Direct Taxes Code, introduced in 2010,

had proposed withdrawal of tax benefit. Though it wouldhave been with prospective effect anexisting investments would have been exempt, there wasstrong opposition to the move.

The revised draft DTC nixed the proposal. However, with

PChidambaram back as finance minister, the original DTCproposals may come back in some form.PPF interest rate reduced to 8.7% from April 1.

http://economictimes.indiatimes.com/topic/P%20Chidambaramhttp://economictimes.indiatimes.com/topic/finance%20ministerhttp://economictimes.indiatimes.com/topic/finance%20ministerhttp://economictimes.indiatimes.com/topic/P%20Chidambaram

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