The Ministry of Finance has issued a notification under G.S.R. 538(E) on August 29, 2024, announcing a significant change to the National Savings Scheme (NSS). Exercising the powers granted by sub-rule (1) of rule 6 of the National Savings Scheme Rules, 1987, the notification supersedes a previous order (G.S.R. 177(E), dated March 1, 2003). The new directive states that from October 1, 2024, all balances credited to the accounts of NSS subscribers will no longer earn any interest. This change marks a departure from the previous interest-bearing structure of the scheme, which has been in place for decades. The notification applies to future balances and does not affect any actions taken before its enforcement. This decision, signed by Ashish Vachhani, Additional Secretary, will likely impact existing and future NSS account holders by altering the returns they can expect from their savings. The cessation of interest is a critical development in the government’s handling of the National Savings Scheme.
MINISTRY OF FINANCE
(Department of Economic Affairs)
NOTIFICATION
New Delhi, the 29th August, 2024
G.S.R. 538(E).—In exercise of the powers conferred by sub-rule (1) of rule 6 of the National Savings Scheme Rules, 1987, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Economic Affairs), number G.S.R. 177(E), dated the 1st March, 2003, except as respects things done or omitted to be done before such supersession, the Central Government hereby notifies that the balances at the credit of the subscribers of the National Savings Scheme under the said rules, on or after the 1st day of October, 2024, shall bear no interest.
[F. No. 14/1/2018-NS-Part(1)]
ASHISH VACHHANI, Addl. Secy.
(i) Persons invested ~37/38 years ago
(ii)GOI should cover the inflation/devaluation of money by way of interest
(iii)Any deviation from the original scheme causing harm/hardship to Senior citizens is very unfair, GOI cannot place itself in the category of cheating the investors.
(iv)Partial withdrawal was part of scheme. It should not be changed
(v)Transfer of the scheme should continue as per SB 14/2021
Govt has cheated the public by withdrawing interest from 1st Oct 24 in NSS 87 scheme.
I have my NSS account in Dehradun and have shifted to Chennai permanently. I tried to transfer the account to Chennai so that I can withdraw balance. The GPO postmaster says it cannot be transferred. I am 74 year old,have to spend around 40000 to go to Dehradun to close account. It is highly unfair as new circular does not say transfer of the account is not possible. Please allow transfer of account to new place of settlement.K.V.Ravinder
It is very unfair on the part of the Government. Earnings of the persons were very low. After graduating from IIT Kanpur in 1965 I reached to the level of CMD of Schedule A PSU. I was Chairman for more than 6 years. Earned appreciations from Bharat Ratna Dr. A P J Abdul Kalam, Dr. K.Kasturi Rangan Chairman ISRO, Dr Anil Kakodkar Chairman AEC for contributions eor the country. Led honest life & served sincerely. Retired with basic salary of Rs 15K/m. Total retiral dues of 26lakhs, No pension. No own house. Could never afford new vehicle, No medical support. Invested in NSS for wife after death. Will Government realise & think what type of an example for a honest person.
We have invested during the period 1989-1993 and the amount was not withdrawn so as it shall be useful in our post retirement. Withdrawal of interest on the deposit is unfair. As withdrawal of amount on account of closure of the deposit is taxable, government should consider giving waiver of tax on the amount withdrawn from NSS 1987 on closure of the deposit account.
yes you are correct.The govt. should accord waiver to interest accured on nss87 scheme
The money in my NSS account was saved in the period 89-92. I have between then and now, transitioned from early middle age to a senior citizen over 70, (which I think is today applicable to most investors in the scheme) but have not withdrawn from this as:
1. It continued to earn an interest of 7.5% per annum.
2. The corpus accumulated would not have been taxed in the hands of my spouse after my death and thus formed a source of support for her in her old age.
3. Now the Min of Finance, has all of a sudden, decided to discontinue this interest leaving me in a lurch.
If I withraw the money, I have to pay income tax on the entire amount at today’s rate. If I do not withdraw it, the sum would be subject to continued value erosion due to inflation as it earns no further interest.
One prop of a senior citizen has thus been taken away.
I request the concerned proper officers to rethink and either to continue the interest or make a one time withdrawal tax free,
There is nothing in the gazette which states
that partial withdrawals from your NSS 97
is not permitted. It is the Post Office staff who say that partial withdrawal is not allowed.
The Finance ministry states only that no interest will be paid after Oct 1st 2024.
Please clarify my doubts. Thanks
Tax Guru
Most of us have Rs 15 to 16 Lakhs in our NSS account. We have no issue closing the account and withdrawing the full balance amount. We will have to pay 30.4% income tax WHICH IS TOTALLY UNFAIR. We have written to the Finance Minister. Has any one filed a case to make it exempt from tax
No clarity regarding the tax on the balance transferred to Post office savings account
In view of zero interest, is it better to close the old NSS 87 account now?