Senior Citizen Saving Scheme 2022: Know All The Perks And Process

Senior Citizen Saving Scheme 2022: Senior citizens can save money through the Senior Citizens’ Savings Scheme (SCSS), a government program that pays out interest on a quarterly basis. A single person or a couple can open this account at a bank or post office. It matures in five years and has an extra eight years of extension facility.

The best part is that the deposit is completely safe with guaranteed returns. Investment in this scheme is not affected by market fluctuations. Tax deduction is also available on deposits in SCSS account.

According to the post office website, a lump sum investment has to be made in SCSS. This account can be opened by a person of 60 years of age or more. If someone’s age is 55 years or more and less than 60 years 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. Also, the amount to be deposited in it should not exceed the amount of retirement benefits.

Annual interest is getting 7.4 percent in the SCSS scheme. The maturity period in this scheme is 5 years. Deposits can be made in multiples of Rs 1000. Also, a maximum investment of Rs 15 lakh can be made in this. After the maturity of SCSS, the account can be extended for another three years. For this, the application has to be submitted within one year from the date of maturity.

If you invest a lump sum of Rs 15 lakh in the Senior Citizens Scheme, the total amount after 5 years at maturity will be Rs 20.55 lakh at an interest rate of 7.4 per cent (compounding) per annum. Here you are getting the benefit of Rs 5.55 lakh as interest. In this way, every quarter interest will be Rs 27,750. Know here that the government reviews the interest rates of small savings every quarter. Your maturity amount may change due to change in interest rates.

Nomination facility is available at the time of opening and closing the account in Senior Citizen Savings Schemes.
This account can be transferred from one post office to another.
Account holders can do premature closure. But the post office will deduct 1.5 percent of the deposit only on closing the account after 1 year of account opening, while 1 percent of the deposit will be deducted after 2 years of closure.

Under section 80C of the Income Tax Act, deduction up to Rs 1.5 lakh can be taken on investment in this scheme.

Income from interest in SCSS is taxed. If the interest income of all your SCSS exceeds Rs 50,000 per annum, then your TDS starts deducting.

The amount of tax is deducted from the interest. If the interest income does not exceed the prescribed limit, then you can get relief from TDS by submitting Form 15G/15H.

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