Yes, at slab rate, but the interest for years 1–4 is deemed reinvested and qualifies for 80C, which largely neutralises the tax under the old regime.
NSC Calculator
Compute the 5-year maturity of a National Savings Certificate at the current 7.7% rate with annual compounding, see the year-wise accrued interest you can claim under Section 80C, and compare with a 5-year tax-saver FD.
Maturity value (5 yrs)
₹1,44,903
Total interest
₹44,903
Interest reinvested & claimable u/s 80C (yrs 1–4)
₹34,543
5-yr tax-saver FD @ 6.05% (SBI)
₹1,35,018
Year-wise accrued interest
| Year | Interest accrued | Value | Deemed reinvested (80C) |
|---|---|---|---|
| 1 | ₹7,700 | ₹1,07,700 | ₹7,700 |
| 2 | ₹8,293 | ₹1,15,993 | ₹8,293 |
| 3 | ₹8,931 | ₹1,24,924 | ₹8,931 |
| 4 | ₹9,619 | ₹1,34,544 | ₹9,619 |
| 5 | ₹10,360 | ₹1,44,903 | ₹0 |
NSC rate 7.7% p.a. (quarter starting 2026-07-01); the rate at purchase is locked for the full 5 years.
How the NSC Calculator works
NSC is a 5-year post-office certificate. Interest compounds annually but is paid only at maturity. Because each year's interest is deemed reinvested, it counts as a fresh 80C investment for years 1–4 — only the final year's interest is taxed without an offsetting deduction.
There is no TDS on NSC. Interest is taxable at your slab in the year it accrues (or at maturity if you follow the cash basis consistently).
Maturity = P × (1 + r)^5
- P
- amount invested
- r
- NSC rate
Worked example
- Investment amount: ₹1,00,000
- NSC interest rate: 7.7%
₹1 lakh at 7.7% grows to ₹1,44,903 in 5 years. About ₹34,543 of the interest accrues in the first four years and can be claimed under 80C.