SCSS is a savings product available for senior citizens aged 60 or above. On the date of opening an SCSS account, the subscriber must be 60 years old or above. However, age relaxation is provided to certain categories of individuals.
With the SCSS account, senior citizens can receive quarterly interest on deposits up to Rs. 15 lakhs.
Where to Open SCSS Account
A senior citizen can open an SCSS account with Post Office and at some banks.
The deposit / Investment made in an SCSS account qualify for deduction under Section 80C of the Income Tax.
According to the official Post Office website, the interest is taxable if the total interest in all SCSS accounts is more than 50,000 in a financial year. In such cases, TDS is deducted from the total interest paid.
However, no TDS is deducted if the account holder submits form 15G / 15H and the accrual interest is not more than the prescribed limit.
Currently, the SCSS interest rate is 7.4%. The Government of India revises the SCSS interest rate, along with other savings schemes, on a quarterly basis. The SCSS Interest Rate 2022 (for the first quarter of the New Year 2022) has remained unchanged.
The amount deposited in the SCSS account cams interest for a term of five years. An account holder can apply for a one-time extension of three years within one year of the maturity of the account.
The deposit in an extended SCSS account will earn interest at the rate applicable on the date of maturity.
Also, the deposit made at the time of opening of an SCSS account is paid to the account holder on or after the expiry of five years from the date of opening the account, or 8 years in cases of an extended account.
A senior citizen can hold an SCSS account in his/her individual capacity or jointly with the spouse. Both spouses can open a single SCSS account and joint accounts with each other. However, in the case of a joint account, age restriction will apply only to the first holder. The whole amount of deposit is attributable to the first account holder only in joint accounts.
If the deposit is in excess to the ceiling amount, the excess amount shall be refunded to the account holder immediately.
Interest on the deposit will be paid once every quarter.
Interest can be drawn through auto credit into the savings account held at the same Post Office branch or through ECS.
The account can be prematurely closed at any time, after the date of opening.
The account may be extended for a Further period for 3 years from the date of maturity.
The extension can be done within 1 year from the date of maturity.