SCSS (Senior Citizen Savings Scheme) was started in the year 2004. At present, SCSS has the highest interest in the post office after Sukanya Samriddhi Scheme.
The Senior Citizen Saving Scheme (SCSS) of the Post Office is a convenient savings scheme for senior citizens. It is helpful in tax saving as well as securing their old age with better returns. Also, since it is a post office scheme, every penny deposited in it is completely safe. SCSS (Senior Citizen Savings Scheme) was started in the year 2004. At present, SCSS has the highest interest in the post office after Sukanya Samriddhi Scheme. Let’s know the complete details about this scheme …
Who can open an account
Under SCSS, a person 60 years of age or older can open an account. If someone is 55 years or older but is less than 60 years old and has taken VRS, then he can also open an account in SCSS. But the condition is that he has to open this account within one month of getting the retirement benefits and the amount to be deposited in it should not be more than the amortization of the retirement benefits.
Minimum and maximum investment and interest rate
The current interest rate on SCSS is 7.4% per annum. This account can be invested only once, which ranges from a minimum of Rs 1000 to a maximum of Rs 15 lakh. Under SCSS, the depositor can also hold more than one account at the joint with the individual or his / her spouse, but the maximum investment limit cannot be more than Rs.15 lakhs, inclusive of all.
Interest is available on quarterly basis
The interest under the scheme will be payable on 31 March / 30 June / 30 September / 31 December from the date of account opening on quarterly basis. If the interest payable every quarter is not claimed by the account holder, then additional interest will not accrue on such interest. Interest can be withdrawn through auto credit to the savings account available at the concerned post office, or ECS. In case of Monthly Income Scheme account being in CBS Post Office, monthly interest can be deposited in Savings Account opened in any CBS Post Office. In case of death of the account holder, from the date of death, the account will earn interest at the rate of post office savings account.
Maturity period and premature withdrawal
The maturity period of SCSS is 5 years. Premature closure is allowed on the account but the post office will not pay any interest if the account is closed before the completion of one year. At the same time, after 1 year of account opening but before completion of 2 years, close of account will deduct 1.5% of the deposit. After 2 years but before the completion of 5 years, 1% of the deposit will be deducted on account closure. After completion of the maturity period, the SCSS account can be extended for another three years. For this, application has to be given within one year of the maturity date. The extended account can be closed after one year from the date of extension without any deduction.
What is the rule regarding tax
TDS is deducted if the interest amount received by the depositor under SCSS exceeds Rs 50,000 annually. No TDS will be deducted if 15G / 15H is deposited and the interest earned does not exceed the prescribed limit. It should also be noted that if there is more than one account under SCSS, then the interest limit of Rs 50000 will be inclusive of all the accounts. However, the money to be deposited in this scheme is exempt under Section 80C of the Income Tax Act.
Nomination and account transfer
Nomination facility is available on SCSS account. If the spouse is a joint holder or sole nominee, the account can be continued till maturity. There is no restriction on the age of the spouse. Apart from this, the facility of transferring accounts from one post office to another, opening of multiple SCSS accounts in the same office is also available.
