SCSS; An Exclusive Scheme For Senior Citizens

Senior Citizen Saving Scheme(SCSS) is a government backed scheme designed for the senior citizens of age 60 or above. There is a clause that who took voluntary retirement can make investment in this scheme before his/her 55 Years of age within 1 month of receiving his or her retirement benefits.

Where can SCSS Scheme be opened-SCSS a/c can be opened at any Post Office or Government Sector Bank where some Private Banks are also offering SCSS scheme. Consult your nearest bank branch whether SCSS scheme is operational in their branches or not

Minimum and Maximum amount to be deposited in a financial year– The retiree can invest a minimum of 1000 rupees per annum and up to 15 Lakhs either in single or joint holders mode. That means, the account can be opened singly or jointly on the name of his spouse, but the maximum amount would not exceed 15 Lakhs in a year.

Maturity Period For SCSS Scheme– The maturity period for this scheme is 5 Years, but can be extended for 3 years further by submitting prescribed application form at Post Office/Bank within 1 Year of maturity date

Interest Rate of SCSS– Currently the interest rate payable to the depositor is 7.4% (But paid Quarterly in installments)Per annum and are subject to change from time-to-time as government revises small saving schemes interest rates every quarter.

Mode of Payment– Interest Pay-outs are credited every Quarter (3 months) subject to 1st of April, July, October and January

Premature Closing clause-The depositor can prematurely close SCSS a/c at any time, but subject to-

  • If the SCSS a/c is closed within 1 Year of a/c opening, no interest would be paid. Only the invested amount would be returned back
  • If the SCSS a/c is closed after 1 year, but before completion of 2 years, an deduction of 1.5% would be deducted from the investment corpus
  • If the above a/c is closed after 2 Years but before 5 Years of a/c opening, 1% would be deductable from the corpus

Income Tax Exemption under section 80(c)– The invested amount is exempted from the income tax act, 1961 but the interest earned under SCSS is “Taxable” as per his/her slab and payable accordingly to income tax department. If in any financial year the interest earned is above 50,000 rupees Tax Deducted at Source(TDS)would be levied on the depositor

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