comparison between NSC and PPF. which option is better

Forums Tax Planning comparison between NSC and PPF. which option is better

comparison between NSC and PPF. which option is better

I recently read a research on investments where there was a comparison between PPF and NSC as investment options. Please suggest which one should I go in for?

Profile photo of Trupti Jambhekar Asked By: Trupti Jambhekar 1 replies 1 helpful answers Last Updated: 8 months ago
  • Profile photo of Trupti JambhekarTrupti Jambhekar
    Participant

    I recently read a research on investments where there was a comparison between PPF and NSC as investment options. Please suggest which one should I go in for?

  • Profile photo of Chetan ChandakChetan Chandak
    Moderator

    if you are ok with a long term investment the in my view PPF is undoubtedly a better option as it provides you 8.1% taxfree interest as compared 8.0% taxable interest on NSC.  Though interest earned on NSC is considered as a fresh investment and qualify for 80C deduction but if you have already completed you Rs. 1.5 Lakh quota the entire interest will be taxable as per your tax slab reducing your effective returns.

    Only thing you should consider is, in case of NSC you will get back the entire amount after 5 years whereas in case of PPF you are allowed to withdraw only partial amount that too after 6 years. But if you are looking to accumulate the balance for your retirement this is the best option other than your EPF.

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