Senior Citizen Savings Scheme (SCSS) Eligibility and Benefits

Last updated on October 11th, 2023 at 04:03 pm

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Senior Citizen Savings Scheme (SCSS) is a retirement benefit savings scheme provided by the Government of India. SCSS aims to provide regular stream of income to the senior citizens.

The scheme apart from providing higher interest rate also comes with a Tax benefits. Read further for elaborate details.

Table of Contents

What is a SCSS?

Government of India has introduced SCSS to provide a secure retirement life to Senior Citizens. Thus an individual above 60 years can avail this scheme from Post Office or from the Authorized bank.

The scheme provides regular income on quarterly or as a bulk payment at the end of the maturity as per the subscribers choice.

Eligibility

SCSS can be opened by any individual who is satisfying the following criteria.

Individual with an age of 60 Years and above.
Individual with an age between 55 and 60 who is retired on superannuation. But the account should be opened with in one month from the superannuation.
SCSS account can be opened on Individual capacity or as a Joint account with spouse. But the first persons age is considered for the eligibility.

Deposit Rules

Minimum Deposit in SCSS account is Rs. 1000 and in multiples of 1000, and should not be more than Rs. 30,00,000.
One individual can open Multiple SCSS account individually or jointly with spouse, but the total deposit in all accounts should not me more than prescribed limit of Rs. 30,00,000.
Only one Deposit is allowed in an account.
If the amount deposited in Senior Citizen Savings Scheme is more than the limit, the excess amount is refunded to the customers Savings Account.

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SCSS Benefits

SCSS gives a steady flow of income for the retired citizens, this scheme comes with the following benefits.

1. Interest

Senior Citizen Savings Scheme provides an interest at the Rate of 8.2% Per Annum at present.

Interest is paid for every quarter on the first working day of April /July /October /January.
Interest is paid to the savings account of the customer, or through the ECS if customer does not have a savings account with the Post Office or the Bank.
TDS is applicable for the interest paid if total interest paid per person exceeds Rs. 50,000 in a financial year.
But there won’t be any TDS deducted if the 15G/15H is submitted by the customer for the financial year.

2. Tax Benefits

You can get a Tax Benefit upto Rs. 1.5 Lakh under 80/C of The Income Tax Act, 1961.

3. Maturity Benefits

SCSS has a maturity period of 5 Years and can be extended for another 3 years. But the extension request should be given before 1 year from the maturity.

In the extended period the account will accrue interest at the same rate as on the maturity date.

Account Closure

On Maturity

The Account can be closed after maturity i.e., 5 years or 8 years if the SCSS is extended from the maturity period.
SCSS account can be closed on the demise of the Account holder. The deposit amount along with the interest till death is paid to the Nominee or the Legal heirs.

Pre closure Account

SCSS account can be preclosed at any time after opening account, But there is a penalty for the preclosure of an account.

If Account is closed within 1 year of account opening, no interest will be payable and if any interest already paid is recovered from principle.
If the Account is closed after 1 year and before 2 years, there will be a penalty charged at 1.5% principle amount.
If the Account is closed after 2 year and before 5 years, there will be a penalty charged at 1 % principle amount.
The accounts extended beyond maturity can be preclosed without any penalty.

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Conclusion

Senior Citizen Savings Scheme (SCSS) is backed by Indian Government is a stable and reliable savings scheme available in the market.

It also provides better interest rate when compared with the regular bank deposits.

Since it does not come with any lock in period and any formalities, it can be closed with ease when there is a requirement.

Thus for a retired people who are looking for save deposit schemes with higher interest this is the scheme to go for.

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