An individual of 60 years of age or more is eligible to open a Senior Citizen Savings Scheme (SCSS) account, which allows to deposit up to Rs 30 lakh and receive interest income on a quarterly basis.
In addition, an individual of the age of 55 years or more but less than 60 years, who has retired on superannuation or under the Voluntary Retirement Scheme (VRS), can also open an account. However, this is subject to the condition that the account be opened within one month of the receipt of retirement benefits; and the amount should not exceed the amount of retirement benefits.
SCSS offers a maturity period of five years. The interest rates for SCSs for this quarter stands at 8.2% per annum. It is possible for a depositor to operate more than one account in individual capacity; or jointly with a spouse, that is husband or wife, as the case is.
Also, SCSS offers nomination facilities; and is available at the time of
opening, and also after opening of the account. Investments under this SCSS scheme qualify for the benefit of Section 80C of the Income-tax Act (ITA), 1961, starting from April 1, 2007.
SCSS accepts only one deposit in the account with a minimum amount of Rs 1,000 and a maximum of up to Rs 30 lakh is permitted.
Interest is taxable if total interest in all SCSS accounts is more than Rs 50,000 in a particular financial year, and the tax deducted at source (TDS) as per the prescribed rate will be deducted from the total interest that is paid.
However, if Form-15 G/15H is presented as well as the accrued interest is not more than the prescribed limit, then no TDS will be deducted.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.