Budget 2025 exempts withdrawals from NSS a/cs up to August 29, 2024 from tax

Feb 1, 2025

Synopsis
Finance Minister Nirmala Sitharaman proposed exemptions for withdrawals from the National Savings Scheme (NSS) post-August 2024, with digitalized processes in place by 2026.

Finance Minister Nirmala Sitharaman has proposed to exempt withdrawals made from NSS by individuals on up after 29th August, 2024. The FM said "Many elderly and extremely elderly people have very old National Savings Scheme accounts. Since interest on these accounts is no longer due."

NSS-87 was launched in 1987 and discontinued in 1992. A fresh series, NSS-92, was launched in 1992 but was discontinued in 2002. No other NSS schemes have been launched since then. NSS-87 allows one withdrawal in a year, but there is no limit on withdrawals from NSS-92.

One should not confuse NSS with the National Savings Certificate (NSC), which is an entirely different small savings scheme. There is no change in NSC.

The finance ministry issued a circular regarding various irregular, or multiple, accounts in small savings schemes on 12 July, saying that all accounts opened under NSS-87 and NSS-92 would get zero percent rate of interest from 1 October 2024. The gazette notification in this regard was issued on 29 August.

The balances at the credit of the subscribers of the National Savings Scheme under these rules, on or after the 1st day of October 2024, shall bear no interest," the ministry added.

[The Economic Times]