Senior Citizen's Savings Scheme
Launched in 2004, Senior Citizens Savings Scheme Account (SCSS) was launched with the primary goal of providing senior citizens in India with a regular income once they reach the age of 60.
Jan 2023
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Is SCSS a good investment?
Launched in 2004, Senior Citizens Savings Scheme Account (SCSS) was launched with the primary goal of providing senior citizens in India with a regular income once they reach the age of 60.
Some of the scheme's primary advantages include tax advantages, safety of principal, flexibility of premature withdrawal with a penalty, and portability to shift the account from one bank to another.
SCSS account can be opened through post office or nationalized banks. Here’s what you need to know about this scheme.
Opening an account
You can open a Senior Citizens Savings Scheme account at all India Post Offices or nationalized banks. To open an account, you need to fill the account opening form and submit copies of KYC documents including proof of identity, proof of address and proof of age along with 2 recent passport-size photographs.
Interest rate
Senior Citizen Savings Scheme (SCSS) offers interest rate of 8% with effect from January 2023. (Source: India Post) Interest rates are aligned with G-Secs of similar maturities which are reviewed quarterly. The SCSS interest rate is paid out quarterly.
Tax benefit
One can save tax on investment of up Rs. 1.5 Lakh per annum under Section 80C of the Income Tax Act 1961.
The interest earned on SCSS is taxable if the total interest in all SCSS accounts exceeds Rs 50,000 in a financial year and TDS is deducted from the total interest paid. No TDS is deducted if you submit form 15 G/15H and accrued interest is not above Rs 50,000.
Exit
Although the scheme has a lock-in period of five years, premature withdrawals are allowed with a penalty.
- If you close the account before 1 year, you don’t get any interest. If any interest is paid, it is recovered from the principal.
- If you close the account after 1 year but before 2 year from the date of opening, 1.5% will be deducted from principal amount.
- If you close the account after 2 year but before 5 year from the date of opening, 1% will be deducted from principal amount.
Investment
You can start investing with a minimum of Rs. 1,000 and in multiples of up to Rs. 30 lakh (from FY23-24) in all SCSS accounts.
Extension
You can extend the scheme for a period of three years within one year from maturity by submitting prescribed form with passbook at concerned post office.
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PGIM India Asset Management Private Limited
(CIN - U74900MH2008FTC187029)
Toll Free Number: 1800 266 7446
Email: care@pgimindia.co.in
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All the Mutual Fund investors have to go through a one-time KYC (Know Your Customers) process. Investor should deal only with the Registered Mutual Funds (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit https://www.pgimindiamf.com/ieid.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. Read more
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