Senior citizen saving scheme (SCSS) is best interest paying scheme for eligible senior citizens - 60 years.
Investment in this scheme is also eligible for deduction under the income tax (IT) act section 80C. Interest in this scheme is 9.3% per year,which is quarterly compounding.
** 6. Whether any income tax rebate / or exemption is admissible?
Yes, income tax deduction under section 80C is admissible under the Scheme. The prevailing Income Tax provisions shall apply. (GOI letter F. No.2 / 8 / 2004 /NS-II dated October 13, 2004)
** 7. Is TDS applicable to the scheme?
Yes, TDS (Tax Deduce at Source) is applicable to the Scheme as interest payments have not been exempted from deduction of tax at source. (GOI letter F. No.2 / 8 / 2004 / NS-II dated March 28, 2006). However person can submit Form 15G / or 15H to avoid TDS if applicable. Also produce PAN Number.
** 8. Whether any minimum limit has been prescribed for deduction of tax at source?
Tax is to be deducted at source as per the minimum limit prescribed by the Government. Now, cut off amount is Rs. 10,000-.
** 9. What is the rate at which TDS is to be deducted from the account holder?
The rate for TDS for a financial year is specified in Part II of Schedule I of the Finance Act for that year. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006).Present TDS rate is 10%.
** 10. Whether TDS should also be recovered from the undrawn interest payable to the legal heirs of the deceased depositors?
Tax shall be deducted at source even from any interest paid / payable to the legal heir of the account holder. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
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