Senior Citizen Savings Schemes or SCSS is an excellent investment for senior citizens in India. It’s a long term option for senior citizens to enjoy a comfortable retired life. You can invest in SCSS at banks and post offices in India.
Who can invest in Senior Citizen Savings Schemes? Senior Citizens who are 60 years and above may invest in SCSS. Retirees who have opted for Voluntary Retirement Scheme or Superannuation in the age bracket of 55-60 years can invest in SCSS. Senior Citizen Savings Schemes offered interest rate of 8.7% for Q3.
You (senior citizen) can invest a maximum of Rs 15 Lakhs in SCSS. This is through individual or joint accounts. HUFs and NRIs cannot invest in Senior Citizen Savings Schemes. SCSS enjoys Section 80C tax benefits up to Rs 1.5 Lakhs a year.
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Senior Citizen Savings Scheme Account
What is the procedure to invest in senior citizen savings scheme?
- If you are over 60 years, open a senior citizen savings scheme account.
- SCSS can be opened at a post office or a public sector bank.
- You can invest a minimum of Rs 1,000 and a maximum of Rs 15 Lakhs.
- SCSS has a maturity period of 5 years. You can fill a form and extend the account for a period of 3 years, within a year from the date of maturity.
- You must fill Form A to open an SCSS account.
- Submit identity proof and address proof like PAN Card or a Passport/Telephone Bill/Voter ID.
- All documents must be attested and also submit 2 passport sized photographs.
SEE ALSO: Procedure to Invest in Senior Citizen Savings Scheme
Benefits of SCSS
- SCSS is a Government sponsored investment scheme for senior citizens. It is a very safe and reliable investment.
- Returns are quite high compared to bank fixed deposits and post office schemes.
- You can nominate (select a nominee) for the senior citizen savings scheme.
- SCSS gives a regular income to senior citizens in retirement. Interest is paid out each quarter on fixed dates. This is the first working day of April, July, October and January. This money comes in handy to senior citizens who need regular income for living expenses.
- Under Section 80TTB, senior citizens do not pay TDS if interest income is less than Rs 50,000 a year. This allows you to avail higher tax deduction on SCSS.
SEE ALSO: Benefits of SCSS
Important Points on Senior Citizen Saving Schemes
- SCSS has maturity tenure of 5 years. Invest in SCSS only if you can stay invested for the long term. There may be an emergency medical condition, home expenses, important expenses which require immediate funds. This would force an early withdrawal and this incurs a penalty.
- SCSS saves tax and offers higher returns than fixed deposits.
- You are offered a passbook which has date of account opening, your name, photograph, address, amount of deposit dates and amount of the quarterly interest payable, maturity date and amount, nomination details after opening SCSS.
- You can close SCSS after 5 years. You get the maturity amount and then you must submit the filled ‘Closure Form’ with the passbook.
- You must have a nominee for the SCSS account. The Principal amount the nominee gets on account holder demise is not taxed. The interest that is paid into this SCSS account after the demise of the account holder is taxed in the hands of the nominee.
- You have to furnish all requisite information when opening the SCSS account. If details/information is found to be false, the deposited amount is refunded after deduction of interest already paid. The SCSS account is closed immediately.
- Returns from SCSS are higher than PPF, EPF, Bank FD, Post Office Saving Schemes among others. This makes it a great fixed income investment. Sadly, interest you receive is taxed.
- SCSS account can be easily and conveniently transferred from one post office to another.
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