The Indian Govt could be very pleasant to senior residents in monetary issues and never solely offers profit of upper tax slabs to senior residents but in addition offers them further curiosity on govt deposits. One such deposit scheme of the Indian govt particularly framed for the good thing about senior residents is the Senior Citizen Saving Scheme (SCSS) and this scheme has been mentioned intimately beneath.
- Really useful Learn: Revenue Tax Slab Charges for Senior Residents
Senior Citizen Saving Scheme: Eligibility and Account Opening
The Senior Citizen Saving Scheme Deposit may be opened in any Submit Workplace throughout India. Earlier these deposits have been solely restricted to Submit Places of work however now the government has additionally allowed such deposits to be opened in sure specified branches of Nationalised and Non-public Banks. Permitting nationalised and personal banks to facilitate the deposits for senior citizen financial savings scheme will guarantee larger attain and ease of entry.
Deposit within the senior citizen financial savings scheme may be made by making an utility in Kind A together with quantity of deposit as per pay-in-slip in Kind D. Senior Citizen Saving Scheme Account can solely be opened by the people who fall in any of the beneath talked about classes:-
- Particular person who has attained 60 years of age
- Particular person who has attained 55 years of age and has retired on superannuation or has taken VRS
- Retired Personnel of Defence Companies are eligible to speculate no matter their age topic to achievement of sure situations
The Particular person could open a single account or a joint account with the partner. The partner could or will not be a senior citizen on the date of opening of account. The age of solely the 1st utility can be thought-about for opening the deposit beneath senior citizen saving scheme.
The depositor could on the time of opening the account or at any time in future earlier than its closure, nominate any individual by making an utility in Kind C.
NRI’s and HUF’s have been particularly excluded from the advantages of this scheme and due to this fact they don’t seem to be allowed to open Senior Citizen Saving Scheme Account.
- Really useful Learn: Easy methods to save tax by forming a HUF
Curiosity Fee on Senior Citizen Saving Scheme
The Curiosity Fee on Senior Citizen Saving Scheme is set by the Govt of India and it retains on altering yearly. The Curiosity Fee on Senior Citizen Saving Scheme for the primary quarter of the monetary 12 months 2016-17 is 8.6% p.a.
Though the rate of interest on senior citizen saving scheme is sort of equal to the curiosity paid on mounted deposits by banks, the extra benefit right here is that curiosity on senior citizen saving scheme is paid quarterly whereas curiosity on mounted deposits is paid yearly.
So, if we see the efficient yearly rate of interest on Senior Citizen Saving Scheme, it might come out to greater than 9.5% approx. To calculate the curiosity that may be payable to you, kindly refer this senior citizen rate of interest calculator.
The Curiosity on SCSS isn’t tax free and tax is required to paid as per Revenue Tax Slab Charges. Furthermore, TDS on Curiosity @ 10% would even be deducted if the curiosity paid in the course of the 12 months is greater than Rs. 10,000.Most and Minimal quantity of deposit in SCSS
The SCSS Deposit Scheme is ruled by the Senior Citizen Saving Scheme Guidelines, 2004 and as per these guidelines, there shall solely be 1 deposit in an account and that too in multiples of Rs. 1000. Subsequently the minimal quantity of deposit is Rs. 1000. The utmost quantity of deposit is Rs. 15 Lakh.
The utmost quantity that may be deposited in senior citizen saving scheme (SCSS) is restricted to the retirement advantages obtained by the individual or Rs. 15 Lakh (whichever is decrease). The quantity deposited in SCSS can be allowed to be claimed as a deduction beneath Part 80C.
Though there shall solely be 1 deposit in a account however an individual is allowed to open a number of accounts as in comparison with PPF whereby an individual is allowed to open just one account.
- Really useful Learn: PPF Account and PPF Curiosity Fee
Tenure of Senior Citizen Saving Scheme
The Tenure of Senior Citizen Saving Scheme (SCSS) is 5 years and from the date of opening the account and on maturity the quantity within the SCSS Deposit may be withdrawn by submitting an utility in Kind E together with the passbook.
SCSS Deposit may be additional prolonged for a interval of three years by submitting an utility in Kind B inside 1 12 months from the date of maturity. If an utility for a similar is made inside 1 12 months from the date of maturity, the extension shall come into impact from the date of maturity and never from the date of submission of utility.
In case the depositor neither closes the account on maturity nor requests for extension inside 1 12 months, the account shall be handled as closed. And in such circumstances the place the account is closed and the quantity has not been withdrawn, curiosity as relevant on Submit Workplace Saving Account shall be payable on such matured deposit.
In case of dying of the depositor earlier than maturity, the account shall be closed and deposit refunded together with curiosity on an utility being made in Kind F. In case it’s a joint account, or the place the partner is the only real nominee, the partner could proceed the account or could shut the account.
Untimely Closure of Senior Citizen Saving Scheme Deposit
A depositor on an utility being made in Kind E is permitted to withdraw the quantity from the Senior Citizen Saving Scheme and shut the account at any time after expiry of 1 12 months from the date of opening of account topic to the next situations:-
- In case the SCSS Deposit Account is closed after the expiry of 1 12 months however earlier than the expiry of two years, 1.5% of the deposit quantity can be deducted and the stability paid to the depositor.
- In case the SCSS Deposit Account is closed after the expiry of two years, 1% of the deposit quantity can be deducted and the stability paid to the depositor.
The depositor availing the ability of extension of account could also be permitted to withdraw the quantity from the senior citizen saving scheme and shut the account at any time after the expiry of 1 12 months from the date of extension of account with none deduction.