A regular source of income is a necessity for senior citizens. But the falling rate of interest of fixed deposit, ppf and other saving schemes has troubled people. For senior citizens, it gets very difficult to reach financial stability.
To help our senior citizens the Indian government has come up with several schemes. SCSS is one such scheme. The full form of SCSS is Senior Citizen Savings Schemes. All individuals above the age of 60 years can benefit from this scheme.
Moreover recently under article 194P, it has been proposed to exempt Senior citizens from filing income tax returns. Individuals above 75 years of age whose pension and interest rate is the only source of income are exempted under this law.
What is SCSS?
The Senior Citizen Savings Scheme is one of the most effective tax savings and regular income sources for old aged people. It comes with ample benefits and attractive benefits.
|Interest Rate||7.4% p.a.|
|Investment Amount||The maximum amount that can be deposited is Rs.15 lakh|
It aims to provide financial security to senior citizens of India. You can open your individual account or joint account under this scheme.
Currently, the scheme is giving a return of 7.4% per annum. This interest rate is much higher than the interest of fixed deposit which is at 5% at present. You can invest a maximum of Rs. 15 lakhs in a financial year.
SCSS is also available as a post office saving scheme backed by the government of India. To open an SCSS account you will have to visit your nearest Indian Post office or bank.
Key Highlights of SCSS
The key features and tax benefits of investing in SCSS are as follows:
- The maturity period is of 5 years. But you can extend the maturity period by 3 years. For this, you will have to submit an application within a year of maturity.
- You can add a nominee at the time of opening the SCSS account or after that.
- An individual can open more than one individual or joint account under the SCSS.
- The joint account is only allowed to be opened with the spouse.
- You can deposit the amount only once. A person can deposit in the multiple of 1000s.
- You can transfer your SCSS account from the bank to the post office or vice versa.
- 5% and 1% charge is deducted in case of premature withdrawal after 1 or 2 years respectively.
- According to section 80C of the Income-tax Act, 1961, individuals are eligible for a tax deduction up to Rs.1.5 lakhs per annum.
Here are some prerequisite conditions that you must fulfil to invest in SCSS.
- The SCSS scheme is only for senior citizens of India above 60 years of age.
- Those who have opted for VRS and are in the age bracket of 55-60 years.
- Retired Defence personnel above 50 years and below 60 can open an account.
- It is mandatory to open the account within a month of receiving the retirement benefits.
- HUFs and NRIs are not allowed to invest under this scheme.
SCSS is one such government scheme that looks forward to supporting the senior citizens of India.