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 act section 80C. Interest in this scheme is 9.3 per cent per year,which is quarterly compounding.
Interest earned on this deposit is taxable under income tax act.
** 1. What are the salient features of the Senior Citizens Savings Scheme, 2004?
The salient features of the Senior Citizens Savings Scheme, 2004 are given below.
Tenure of the deposit account: 5 years, which can be extended by 3 years.
Rate of interest : 9.3% per year
Frequency of computing interest :Quarterly
Taxability : Interest is fully taxable.
Whether TDS is applicable :Yes. Tax will be deducted at source.
Investment to be in multiples ofRs.1,000
Maximum investment limit:Rs.15 lakh
Minimum eligible age for investment : 60 years (55 years for those who have retired on superannuation or under a voluntary or special voluntary scheme).
The retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to invest irrespective of the age limits subject to the fulfillment of other specified conditions
Premature closure / withdrawal facility: Permitted after one year of opening the account but with penalty.
Transferability : Not transferable
Tradability : Not tradable
Nomination facility : Nomination facility is available.
Modes of holding : Accounts can be held both in single & joint holding modes. Joint holding is allowed only with spouse.
Application forms available with:Post Offices and designated branches of 24 Nationalised banks and one private sector bank
Applicability to NRI, PIO and HUFs : Non Resident Indians (NRIs), Persons of Indian Origin (PIO) and Hindu Undivided Family (HUF) are not eligible to open an account under the Scheme.
Transfer from one deposit office to another : Transfer of account from one deposit office to another is permitted.
** 2. Can a joint account be opened under the scheme with any person?
Joint account under the SCSS, 2004 can be opened only with the spouse. [Rule 3 (3)]
** 3. What should be the age of the spouse in case of a joint account?
In case of a joint account, the age of the first applicant / or depositor is the only factor to decide the eligibility to invest under the scheme. There is no age bar / or limit for the second applicant / or joint holder (that is spouse). [Rule 3 (3)]
** 4. What will be the share of the joint account holder in the deposit in an account?
The whole amount of investment in an account under the scheme is attributed to the first applicant / or depositor only. As such, the question of any share of the second applicant / or joint account holder (that is spouse) in the deposit account does not arise. [Rule 3 (3)]
** 5. Whether both the spouses can open separate accounts in their individual capacity with separate limit of Rs.15 lakh for each of them?
Both the spouses can open individual and / or joint accounts with each other with the maximum deposits up to Rs.15 lakh each, provided both are individually eligible to invest under relevant provisions of the Rules governing the Scheme. (Rules 3 and 4 )
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