Senior Citizen Savings Scheme (SCSS) is a savings scheme for the elderly. It offers good interest and income tax concessions. Up to Rs 30 lakh can be invested in this scheme.
SCSS Saving Scheme is one of the few important schemes designed by the central government for senior citizens. It is a scheme that offers good amount of interest along with tax concessions. As of now, the government has given 8% percent to the money from January to March. It is not yet known how much interest the government will pay for the quarter after April 1. The government was expected to announce it this month. However, according to reports, there will be no announcement for the time being.
Starting from January 1, every three months, the government will deposit fixed interest on the deposit amount of this scheme. That means interest accrual date is 1st January, 1st April, 1st July and 1st October. If the first date of that month is a holiday, interest will be credited on the first working day.
What is the age limit for Senior Citizen Savings Scheme?
This is a scheme designed for senior citizens. 60 years and above can open account. Voluntary retirees on VRS are exempted from age limit. Such people who have crossed the age of 55 years can avail the Senior Citizens Savings Scheme. Further, those who have retired from military service can invest in this scheme after completing 50 years of age.
What is the duration of SCSS scheme?
The tenure of Senior Citizens Saving Scheme is 5 years. It can be extended for another 3 years. One can invest from Rs 1,000 to Rs 30 lakh. But, like a fixed deposit, you can invest in this scheme only once. It cannot be paid in installments every year.
Deposits up to Rs 1 lakh can be given in cash form. If the amount is more than one lakh, then the payment should be made by cheque.
Can Senior Citizen Savings Scheme be canceled prematurely?
If you want to cancel the SCSS plan before the period, it is possible. But, like in FD, some fee has to be paid in this too. If the scheme is canceled after one year from the start of the scheme, % of the total deposit amount. 1.5% is to be paid as fee. If withdrawn after two years. A fine of 1% will have to be paid.
Calculation of Tax Profits and Losses for SCSS Scheme
The Senior Citizens Savings Scheme offers tax concession under Section 80C of the Income Tax Act, 1961. In this section, tax deduction is available for investments up to Rs 1.5 lakh. Investment in SCSS scheme can be shown in it.
It is important to note here that TDS tax is applicable if the interest earned on your investment is more than Rs 10,000 per annum.