Senior Citizen Savings Scheme (SCSS) is a government scheme. Therefore, there is no risk of money sinking in it. The special thing about this scheme is the interest received in it.
SCSS: After retirement, despite the reduction in income, expenses continue. In such a situation, correct financial planning is very important. Therefore, it becomes necessary for senior citizens to invest their money in such a place, from where they get good interest as well as the investment is risk-free. Senior Citizen Savings Scheme (SCSS) is a safe and beneficial option for retired persons, which provides financial stability along with regular income. By investing a lump sum in this scheme, one can avail the benefit of guaranteed income as well as tax exemption.
Senior Citizen Savings Scheme (SCSS) is a government scheme. Therefore, there is no risk of money sinking in it. The special thing about this scheme is the interest received in it. SCSS gives 8.2% annual interest. This interest is more than other traditional investment options like FD. Also, by investing in this scheme, one gets the benefit of tax exemption under Section 80C of the Income Tax Act.
₹2 lakh guaranteed income on investment of ₹5 lakh
According to the SCSS calculator, if a person invests ₹5,00,000 in lump sum, then the total amount will become ₹7,05,000 in 5 years. It will fetch interest of ₹2,05,000. Every quarter, interest of ₹10,250 will be credited to the account.
Minimum investment
Investment in Senior Citizen Savings Scheme (SCSS) can be started from ₹ 1,000. A maximum of ₹ 30 lakh can be invested in this scheme. Its maturity period is 5 years. After 5 years, the amount invested is returned along with interest.
Who can invest?
- Senior citizens aged 60 years and above.
- Retired government employees aged 55-60 years, provided investment is made within one month of retirement.
- Retired defence personnel aged 50-60 years.
Tax rules on interest
If the annual interest from all SCSS accounts exceeds ₹50,000, TDS will be deducted. However, TDS will not be deducted if Form 15G/15H is submitted.
Other features of SCSS account
Joint account: Husband and wife can open the account jointly. Maximum investment limit is ₹30 lakh.
Interest payment: Interest is paid on quarterly basis. It can be withdrawn through auto credit to the savings account or through ECS.
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