Senior citizens savings scheme (SCSS): The Senior Citizens Savings Scheme (SCSS) is a government-backed retirement benefits program. Senior citizens resident in India can invest a lump sum in the scheme, individually or jointly, and get access to regular income along with tax benefits. It is a Post Office savings scheme.
Find out Benefits, Interest Rates, Other Features. Here we are providing full details for Senior citizens savings scheme like – Where once can open an account ?, Single or joint account, One or more account, Minimum deposit, Maximum Deposit, Rate of interest, Taxability of Interest, Premature withdrawal etc. we already provide Many govt. Schemes in our past articles like – Employee Pension Scheme, National Pension Scheme etc.
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Senior citizens savings scheme (SCSS)
Government of India had come with a scheme called Senior Citizen Saving Scheme in 2004 in order provide a good source of investment to senior citizens so that it would be useful to them at their times of no earnings.
Here are some of the key features of the SCSS:
- Minimum investment: Rs. 1,000
- Maximum investment: Rs. 15 lakh
- Interest rate: 8.20% p.a. (for the quarter ending 30 June 2023)
- Tenure: 5 years, extendable by 3 years
- Tax benefits: Interest income from SCSS is tax-free under Section 80C of the Income Tax Act, 1961.
Here are some of the benefits of investing in the SCSS:
- Guaranteed returns: The interest rate on SCSS is fixed by the government and is reviewed quarterly.
- Tax benefits: Interest income from SCSS is tax-free.
- Regular income: SCSS provides a regular income for senior citizens.
- Security: SCSS is a government-backed scheme, so your investment is safe.
Benefits of Senior citizens savings scheme
Salient features including Tax Rebate
- An individual of the Age of 60 years or more may open the account.
- An individual of the age of 55 years or more but less than 60 years who has retired on superannuation or under VRS can also open account subject to the condition that the account is opened within one month of receipt of retirement benefits and amount should not exceed the amount of retirement benefits.
- Maturity period is 5 years.
- A depositor may operate more than one account in individual capacity or jointly with spouse (husband/wife).
- Account can be opened by cash for the amount below INR 1 lakh and for INR 1 Lakh and above by C heque only.
- In case of Cheque, the date of realization of Cheque in Govt. account shall be date of opening of account.
- Nomination facility is available at the time of opening and also after opening of account.
- Account can be transferred from one post office to another
- Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts.
- Joint account can be opened with spouse only and first depositor in Joint account is the investor.
- Interest can be drawn through auto credit into savings account standing at same post office, through PDCs or Money Order.
- In case of SCSS accounts, quarterly interest shall be payable on 1st working day of April, July, October and January. It will be applicable at all CBS Post Offices.
- *Quarterly interest of SCSS accounts standing at CBS Post offices can be credited in any savings account standing at any other CBS post offices.
- Premature closure is allowed after one year on deduction of an amount equal to1.5% of the deposit & after 2 years 1% of the deposit.
- After maturity, the account can be extended for further three years within one year of the maturity by giving application in prescribed format. In such cases, account can be closed at any time after expiry of one year of extension without any deduction.
- TDS is deducted at source on interest if the interest amount is more than INR 10,000/- p.a.
Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.
Rate of Interest of Senior citizens savings scheme 2021
- From 1.04.2020, interest rates are as follows:- 7.40 % per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st December.
- There shall be only one deposit in the account in multiple of INR.1000/- maximum not exceeding INR 15 lakh.
- Account can be opened by cash for the amount below INR 1 lakh and for INR 1 Lakh and above by cheque only.
- Premature closure is allowed after one year on deduction of an amount equal to1.5% of the deposit & after 2 years 1% of the deposit.
- TDS is deducted at source on interest if the interest amount is more than INR 10,000/- p.a.
Where once can open an account ?
One who is eligible for this scheme can open the Senior Citizen Saving Scheme account in any post office branch across India and in the branches of all nationalized and some private banks.
| 1 | State Bank of India |
| 2 | State Bank of Hyderabad |
| 3 | State Bank of Bikaner and Jaipur |
| 4 | State Bank of Patiala |
| 5 | State Bank of Mysore |
| 6 | State Bank of Travancore |
| 7 | Allahabad Bank |
| 8 | Andhra bank |
| 9 | Bank of Baroda |
| 10 | Bank of India |
| 11 | Bank of Maharashtra |
| 12 | Canara Bank |
| 13 | Central Bank of India |
| 14 | Corporation Bank |
| 15 | Dena Bank |
| 16 | Indian Bank |
| 17 | Indian Overseas Bank |
| 18 | Punjab National Bank |
| 19 | Syndicate Bank |
| 20 | UCO Bank |
| 21 | Union Bank of India |
| 22 | United Bank of India |
| 23 | Vijaya Bank |
| 24 | IDBI Bank |
| 25 | ICICI Bank Ltd. |
Eligibility :
1) An individual who has attained the age of 60 years or above.
2) An individual Who has attained the age of 55 years or more but less than 60 years, and who has retired on superannuation.
3) Retired personnel of Defence Services shall be eligible to subscribe under the scheme irrespective of the above age limits subject.
Single or joint account :
The Individual may open a single account or a joint account with the spouse. And it was not said any where that the spouse should be a senior citizen.
One or more account :
A depositor may operate more than one account subject to the condition that deposits in all accounts taken together shall not exceed the maximum limit of Rs.15 lakhs and provided that deposits by depositors shall be restricted to the retirement benefits or Rupees 15 lakhs whichever is lower.
Nomination :
The depositor may, at the time of opening of the account, nominate a person or persons who, in the event of death of the depositor, will be entitled to payment due on the account. Nomination can be made even after opening the account but it should be made before closure of the account.
Minimum deposit :
Rs. 1000 and in multiples thereof.
Maximum deposit :
The maximum amount of deposit is Rs. 15 Lakh.
Rate of interest :
Rate of interest is decided by ministry of finance every year. The Interest Rate on Senior Citizen Saving Scheme for the financial year 2021-22 is 7.4% p.a. And interest is paid quarterly.
As Per India Post –
From 1.04.2020, interest rates are as follows:-
7.40% per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st December.
Must Read – Interest Rate of NSC, PPF, KYP, SSY, SCSS
Taxability of Interest :
The Interest on SCSS is not tax free and tax is required to be paid as per the Slab Rates. And,TDS on Interest @ 10% would also be deducted if the interest paid during the year is more than Rs. 10,000.
Tenure of the scheme :
The Tenure of Senior Citizen Saving Scheme is 5 years and from the date of opening the account.
Extension :
A depositor may extend the account for a further period of three years by making an application to the deposit office within a period of one year after maturity.
Premature withdrawal :
1) Premature withdrawal / closure of the deposits from the accounts under the SCSS, 2004 has been permitted after completion of one year from the date of opening of the account after deducting the penalty amount as given below.
A) If the account is closed after 1 year but before expiry of 2 years from the date of opening of the account, an amount equal to 1.5% of the deposit shall be deducted.
2) If the account is closed on or after the expiry of 2 years from the date of opening of the account, an amount equal to 1 % of the deposit shall be deducted.
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