Post Office Alert: Major Rule Change That Could Impact Your Savings

The government has made a significant change to the National Savings Scheme (NSS), affecting interest payments for depositors. If you invested in this scheme, here's what you need to know:

1. Interest Payments Halted:
   Interest payments on NSS deposits stopped as of October 1, 2024. The scheme, which offered a 7.5% annual interest rate, will no longer provide returns on deposits.

2. Deadline to Withdraw Funds:
   Depositors were instructed to withdraw their funds by September 30, 2024. Any funds left in the scheme will not earn interest moving forward.

3. KYC Update Required:
   Investors were also advised to update their KYC information to access their funds without issues.

4. Not to Be Confused with NSC:
   The NSS is distinct from the National Savings Certificate (NSC), which remains unaffected by this rule change.

5. Scheme Background:

   • Launched in 1987, the NSS allowed annual investments up to ₹40,000, offering tax benefits under Section 80C of the Income Tax Act.
   • It was closed to new investors in 1992, though existing accounts continued to earn interest until now.

6. Tax Implications:
   Withdrawals from NSS are taxable in the year they are withdrawn unless inherited, in which case the amount is tax-free.

With this change, existing NSS investors should explore alternative options to maximize returns and secure their savings.