The Senior Citizen Savings Scheme (SCSS) is suggested as one of the alternatives for the elderly to invest their money, especially from their retirement benefits. Let’s understand Senior Citizen Savings Scheme (SCSS) in detail. Who can invest? How much can one invest? What is the interest rate on Senior Citizen Saving Scheme? How it is calculated? TDS & Income Tax on Senior Citizen Saving Scheme?
Table of Contents
What is Senior Citizen Savings Scheme or SCSS?
Senior Citizen Savings Scheme (SCSS) is a five year scheme which was introduced in the Oct 2004. This scheme provides interest at around 9% p.a at quarterly interval, which is taxable. The SCSS is safe as the scheme is backed by the Government of India, making it totally risk-free with guaranteed returns.
Who can invest?
As the name suggests SCSS is for Senior Citizens. The investment may be opened by an individual, in individual capacity or jointly with spouse, if
- One has attained age of 60 years or above on the date of opening of the account.
- One has attained the age 55 years or more but less than 60 years and has retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening of the account within three months from the date of retirement. The account has to be opened by such individual within three months of the date of retirement.
- There is No age limit for the retired personnel of Defence services(excluding Civilian Defence Employees) provided they fulfill other specified conditions.
The Senior Citizen Savings Scheme account can not be opened by Non-Resident Indians (NRI), Persons of Indian Origin (PIO) and Hindu Undivided Families (HUF).
What is the maximum amount or minimum amount that can be invested in SCSS?
- The maximum amount that can be deposited in senior citizen saving scheme (SCSS) is restricted to the retirement benefits received by the person or Rs. 15 Lakh (whichever is lower).
- Minimum amount is Rs 1,000. Any amount between Rs. 1,000 and Rs. 15 Lakhs can be invested in multiples of Rs. 1,000.
Source of Funds to be invested in SCSS?
To invest in Senior Citizen Savings Scheme
- For people between 55 and 60 years of age, the amount invested in SCSS has to come from their retirement benefits and that too within three months of retirement.
- For persons over the age of 60 years, there is no restriction on the source of funds to be invested.
Retirement benefits for the purpose of SCSS Rules have been defined as any payment due to the depositor on account of retirement whether on superannuation or otherwise and includes Provident Fund dues, retirement / superannuation gratuity, commuted value of pension, cash equivalent of leave, savings element of Group Savings linked Insurance scheme payable by employer to the employee on retirement, retirement-cum-withdrawal benefit under the Employees’ Family Pension Scheme and ex-gratia payments under a voluntary retirement scheme.
What happens after Senior Citizen Saving Schemes matures?
The Senior Citizen’s Savings Scheme has a maturity of 5 years from the date of opening the account.
- On maturity, the depositor can either withdraw the money by submitting an application in Form E along with the passbook or
- extend the account by another three years by submitting an application in Form B within one year. The extension will be from the date of maturity and not from the date of submitting the form. The interest rate for the first five years is based on rates prevailing at the time of your investment. However, the rate of interest for the extended term of three years will be based on the prevailing interest rate on the date of maturity of your account. The Indian government revises the rate of interest on SCSS on a quarterly basis.
If the depositor doesn’t close the account on maturity or ask for an extension within a year, the account will be treated as closed. However, the maturity amount will earn interest rate applicable on post office saving account.
If you want to open a new account with the maturity amount after eight years, you are free to do so.
On maturity after five years, the Senior Citizen Savings Scheme (SCSS) account can be extended by another three years.
Interest and Senior Citizen Savings Scheme SCSS
Who decides the interest rate in Senior Citizen Savings Scheme , SCSS?
Interest Rate on Senior Citizen Saving Scheme is decided by the Govt of India and it keeps on changing every quarter. The interest is computed and paid out every quarter on 31st March, 30th June, 30th September and 31st December. Interest rate on SCSS over time is given below.
| Period | Interest Rate |
|---|---|
| Upto 31.03.2012 | 9.00% per annum |
| 01.04.2012 to 31.03.2013 | 9.30% per annum |
| 01.04.2013 to 31.03.2014 | 9.20% per annum |
| 01.04.2015 to 31.03.2016 | 9.30% per annum |
| 01.04.2016 to 30.09.2016 | 8.60% per annum |
| 01.10.2016 to 31.03.2017 | 8.50% per annum |
| 01.04.2017 to 30.06.2017 | 8.40% per annum |
| 01.07.2017 onwards | 8.30% per annum |
How is interest computed in Senior Citizen Scheme?
The interest is computed and paid out every quarter on 31st March, 30th June, 30th September and 31st December.If the interest payable every quarter is not claimed by a depositor, such interest do not earn additional interest. For the first time it is paid from the date of deposit to 31st March/30th June/30th September/31st December and then every quarter.
Interest is rounded off to the nearest multiple of one rupee. Any amount equal to or more than fifty paisa is treated as rupee one and any amount less than fifty paisa will be ignored.
To calculate quarterly payment, interest rate p.a is divided by 4 and multiplied by principal amount. . So if one invests Rs 1,00,000 on 1 Oct 2012 when interest rate was 9.30%, every quater the person would receive (P * R/(4 * 100)) =1,00,000 * 9.30/(4* 100)= 100000 *(2.325/100) = 2325.
What are the options on maturity of SCSS?
As mentioned earlier, the Tenure of Senior Citizen Saving Scheme is 5 years from the date of opening the account. On maturity the options before the individual.
- One can close the account and withdraw the amount in SCSS by submitting Form E along with the passbook.
- SCSS can be further extended for a period of 3 years by submitting Form B within 1 year from the date of maturity. Please note that the extension shall come into effect from the date of maturity and not from the date of submission of application.
- If the depositor neither closes the account on maturity nor requests for extension within 1 year, the account shall be treated as matured. They can close the account at any time. Interest on the account will be paid at the rate applicable to the deposits under the Post office Savings Accounts, upto the end of the month preceding the month of the closure of the account.
Income Tax and Senior Citizen Savings Scheme SCSS
The principal, i,e investment under SCSS, qualifies for the benefit of Section 80C of the Income Tax Act, 1961. Remember that 80C has limit of 1.5 lakh and includes EPF ,PPF, Insurance etc. Section 80C benefit is available in the financial year in which the deposit is made in SCSS. As per SCSS Rules, only one deposit is allowed in one SCSS account. There will be no additional benefit under Section 80C for the remaining years or extension of an existing account after five years
The interest earned on the deposit is fully taxable as per senior citizen income slab. TDS can be deducted on interest earned if it exceeds the minimum limit prescribed by the Government which currently is Rs 10,000 and TDS is 10%.
So if a senior citizen is in 30% tax bracket, invests 15 lakh and interest earned on his investment in the financial year will be 34,875. As it is more than 10,000, therefore, TDS will be deducted at 10% i.e 3487.50 and he gets 31,387.5. He still needs to pay remaining 20% of tax.
If senior citizen income is below the exemption limit, he can provide form 15H(for more than 60 years) or 15G(for less than 60 years) so that no tax is deducted at source. If due to some reasons TDS is deducted he can claim only by filing the Income Tax Return and asking for refund. Our article Income Tax rates Since AY 1992-1993 and Senior Citizen : Income and Tax discuss it in detail.
Joint Account in SCSS
The account can be opened as a single account, or can be opened in joint names. In case of joint account
- The joint account holder can only be the spouse.
- There is no age limit applicable for the joint account holder (spouse). In case of a joint account, the age of the first applicant is the only factor to decide the eligibility to invest under the scheme.
- In case of the death of the primary account holder, the spouse can continue the account subject to the condition that his or her total investment in SCSS should not exceed Rs. 15 Lakhs.
- 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 (i.e. spouse) in the deposit account does not arise.
- 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
- In case of a joint account, if the first holder expires before the maturity of the account, the spouse may continue the account on the same terms and conditions as specified under the SCSS Rules. However, if the second holder i.e. spouse has his / her own individual account, the aggregate of his/her individual account and the deposit amount in the joint account of the deceased spouse should not be more than the prescribed maximum limit i.e 15 lakh. In case the maximum limit is breached, then the remaining amount shall be refunded, so that the aggregate of the individual account and deceased spouse’s joint account is maintained at the maximum limit.
- If both the spouses have opened separate accounts under the scheme and either of the spouses dies during the currency of the account(s), the account(s) standing in the name of the deceased depositor/spouse shall not be continued and such account(s) shall be closed. The account can be closed by making an application in Form F. Annexures II & III to Form F can be attested by the Oath Commissioner or Notary Public
Premature or Early Withdrawal in SCSS
The amount can be withdrawn before the maturity date, provided the deposit is at least 1 year old. But early withdrawal carries penalty as follows:
- Account age between 1 and 2 years: 1.5% of the deposit amount
- Account age over 2 years: 1% of the deposit amount
Loan or Pledging of SCSS
One can not obtain a loan against the SCSS account by pledging it.
Nomination of SCSS
Nomination facility is available for the Senior Citizen Savings Scheme.The depositor may, at the time of opening of the account, nominate a person or persons who, in the event of death of the depositor, will be entitled to payment due on the account.
- Names of one or more persons can be specified as nominees.
- Nomination can be done even after opening the account.
- The nomination can also be changed or cancelled later by filling Form C.
- In case of joint account, the joint holder is entitled to the amount in case of death of the primary account holder. The nominee(s) would have a claim only after the death of both the joint holders.
Comparing SCSS to Bank Fixed Deposits
The SCSS scores over bank fixed deposits on two counts: default risk and return. Average fixed deposit return is 6-7 per cent per year, while the SCSS currently gives 8+ per cent, compounded quarterly. The SCSS has sovereign guarantee while bank fixed deposits are insured only up to Rs 1 lakh per branch.
Where to open an Account for SCSS?
Any head post office or general post office or Select branches of the 24 designated nationalized banks:
State Bank of India, State Bank of Hyderabad, State Bank of Indore, State Bank of Bikaner and Jaipur, State Bank of Patiala, State Bank of Saurashtra, State Bank of Mysore, State Bank of Travancore, Allahabad Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Punjab National Bank, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India, Vijaya Bank and ICICI Bank.
How to Open an SCSS Account?
Once you have selected the post-office/bank to open the SCSS account, you will first need to open a savings bank account and you will need the following documents:
- An account opening form which the bank will provided.
- Two passport size photographs.
- Address and identity proof such as copy of the passport, PAN (permanent account number) card or declaration in form No 60 or 61 as per the Income Tax Act 1961, driving license, voter’s identity card or ration card.
- Carry original identity proof for verification at the time of account opening.
On opening of an account, the depositor is given a pass book immediately, alongwith the depositor’s copy of the pay-in-slip (Form-D) duly stamped and signed by the deposit office.
Transfer of Account
A depositor can transfer his account from one deposit office to another by filling in Form G and enclosing the Pass Book. If the deposit amount is rupees one lakh or above, a transfer fee of rupees five per lakh of deposit for the first transfer and rupees ten per lakh of deposit for the second and subsequent transfers shall be payable.
Ref : electronic version of the Senior Citizens Savings Scheme Rules, 2004 (pdf) with Forms at Finance Ministry website, SCSS FAQ at RBI website
Related Articles:
All about Senior Citizen and Retirement, Income Tax, Form 15H,Will
- Senior Citizen,Fixed Deposits and Tax
- Senior Citizen : Income and Tax
- Income Tax rates Since AY 1992-1993
- Understanding Income Tax Slabs,Tax Slabs History
- On Inheriting,Tax of Property,Mutual Funds,Shares,FD etc
- Right Paper Work For Those You Love: Part 1, Will: Right PaperWork For Those You Love-Part II
The main objective of the SCSS is to provide an assured 9+per cent return paid every quarter to senior citizens which helps them to create a guaranteed regular income flow. The SCSS is a good option for senior citizens. What do you think? Have you or your parents invested in Senior Citizen Savings Scheme or SCSS.
Post office deducted TDS against quarterly interest payment against my SCSS. My quarry are:
1)is TDS section will be shown in 26AS form
2) can I give Non deductions of TDS to post office by form
1. Yes it will be shown in Form 26AS
2. Yes you can submit form 15H. Please go through the article How to Fill Form 15G? How to Fill Form 15H?
Sir ji mane four lac ki sbi bank me scss 18/9/2010 ko karvayi thi jo ki 18/9/2015 ko puri ho gaye thi. Par sir m bimari ke karna es ko rakhi k bhul gya tha. Jis ke katana ye ab ye four years three mounth overdue ho chuki hai par bank es par koye bhi intrest nahi de raha hai. Bank ka computer zero intrest show kar raha hai overdue period ka. Bank
ka manager bhi intrest dene se mana kar raha . Please hlep him. Ya es ka rule ho ki me application de kar es ko back date se intrest le saku
POST OFFICE SENIOR CITIZEN SCHEME, SINGLE ACCOUNT HOLDER IS EXPIRED ON 22ND JUNE 2019.
DEATH CLAIM IS SUBMITTED WITH POST OFFICE ON 8TH AUGUST 2019 BY NOMINATED.
TILL TODAY 15TH NOVEMBER 2019 IT IS NOT SOLVED OR CLEAR
WHAT IS THE INTEREST RATE APPLICABLE ON THIS CLAIM??
WILL YOU SUGGEST ABOUT IT??
FROM :AHMEDABAD
Thanks .The rules provide for opening the account when the spouse and second holder is not a senior citizen . And this is a quarterly interest scheme . Normally intimating the bank about the death of the primary holder etc , takes time . So , in the eventuality of the death of the primary holder , whilst the second holder is not a senior ctz , it will land the surviving holder in a spot where he will have to arrange for paying back the bank all the interest thus far received . Think this requires the attention of the law makers or a clear clarification, to avoid inconvenience to senior citizens .
in case of a joint account and in the event of death of the first holder , can the spouse who is not a senior citizen at the time of death , continue the account under the scheme and avail the interest applicable to the scheme till maturity of 5 years and also extend the deposit for further 3 years ? Branch opinion is savings rate of interest becomes applicable since spouse not a senior citizen at the time of death . How do I counter this ?
Tricky question. The law for joint account in Senior Citizen scheme is given below.
So as the spouse is not a senior citizen the post office cannot continue the account.
In case of a joint account, if the first holder/depositor expires before the maturity of the
account, the spouse may continue the account on the same terms and conditions as
specified under the SCSS Rules. However, if the second holder i.e. spouse has his / her
own individual account, the aggregate of his/her individual account and the deposit
amount in the joint account of the deceased spouse should not be more than the
prescribed maximum limit. In case the maximum limit is breached, then the remaining
amount shall be refunded, so that the aggregate of the individual account and deceased
spouse’s joint account is maintained at the maximum limit. [Rules 6 (4) and 8 (3)]
Hi , just thought of updating the readers with a clarification received from the Department of Economic affairs(DEA) . In the context of the query raised by me if the spouse can continue the SCSS post death of the first holder where second holder is not a senior ctz at the time of death of first holder , the DEA has confirmed that in case of joint account , the age of the 1st holder is the only factor to decide eligibility to invest under the scheme , there is no age bar for the joint holder . Hence , the second holder can continue the deposit under the terms and conditions of SCSS . I am also glad to highlight that this prompt communication was received directly from the Government of India , MinistryOf Finance, in the matter of a fortnight in response to an online query raised on GOI’s grievance site . This comes as a relief in a situation where each bank tries to enforce its understanding about SCSS on the harrowed customer who does not know how to resolve the dilemma .
Dear Sir,
My SCSS for Rs 2 lakh expired on 15.2.18 at Bank of Baroda. I gave written request to close account on 15.2.18. Due to malfunctioning of their system, they could not close account and deposit amount in my account on 15.2.18. They were finally able to close it on 1.3.18. I was given interest only up to 15.2.18.
Bank is showing its inability to pay interest from 15.2.18 to 28.2.18. Kindly let me know:
1. Am I entitled to get interest for the period 15.2.18 to 28.2.18.
2. If yes, at what rate and who should pay that. (problem arose for no fault of mine, but due to malfunctioning of Bank’s system)
3 . If Bank refuse to pay interest, what should I do?
4. Any other relevant point.
Kindly help. Thanking you in anticipation.
Postmaturity you are subject to receive interest as per the ongoing interest rate which is 4%.
This will be paid until end of the month preceding the month of the closure of the account.
If it closed on 1 Mar 2018 then you should be paid interest from 15 Feb to 28 Feb
Let us find answers to the remaining question and get back to you.
If the scss account opened contravention of rules even sb rate of interest will not be given
Yes Maam you are right Whenever it comes to notice that an SCCC account has been opened in contravention of the rules, the account shall be closed immediately and the deposit
in the account, after deduction of the interest, if any, paid on such deposit, shall be refunded to the depositor.
I have deposited rs 6.5lakhs in scss in icici bank.I have received sms from bank that amt.is debited from a/c.
I asking for passbook & a/c no for my records.They say u will get it by courier from Govt.
They have not given me receipt of acknowledgement.25days have passed.
We can understand your problem.
When the interest is debited to your account on 30 sep then you would get a clue but it is frustrating waiting.
Please first raise the issue with social media account of ICICI.
You can use twitter handle of ICICI and service queries, tag @ICICIBank_Care
We have raised the question on twitter handle.
We shall try to get more information and let you know
sir, i opened scss a/c in post office for rs. 10 lacs in jan 2017. in this month, i opened another scss ac and deposited 15 lacs due to miscommunication in sbi. i informed at sbi that my ceiling limit exceeded. requested them to cancel my scss. they are not helpful. whom to complain. pl. advise.
Did you try approaching the post office?
hat happens if an account is opened in contravention of the SCSS Rules?
If an account has been opened in contravention of the SCSS Rules, the account shall
be closed immediately and the deposit in the account, after deduction of the interest, if
any, paid on such deposit, shall be refunded to the depositor. (Rule 12)
You can raise the issue with social accounts of SBI at @TheOfficialSBI or facebook page or https://www.facebook.com/StateBankOfIndia/
I Dr. Rup Kumar Roy invested a few lakh rupees in SCSS post office at Varanasi . I got interest regularly and they gave me 16A form with TDS every quaterly. But the problem started when I deposited the whole year income tax return. I found although tax had been deducted but it should be shown in my 26AS account of income tax. Because, IT personnel, Bangalore will verify my tax deduction by seeing my 26AS account . But it was not showing and income tax department said that you have not pay the TDS amount. So, they make me defaulter and deduct the same which should be. I have complained to superintendent post office of concerned section but nothing happened in 26AS account. I wrote Post Master General, Allahabad, Lcknow. but no action was taken by the concerned post office. So, it is better not to invest in SCSS post office. What I should do now, where to write?
Sir Form 16A means that TDS has been deducted and deposited.
It should match in Form 26AS. For Form 26AS the PAN number has to be provided.
Can you mail the Form 16A and Form 26AS.
If I don’t take any tax benefit from my scss account for the first financial year.could it be possible to take benefit for the same account for next financial year.or any year with in period of 5 years.
As per every article on the SCSS it written ” the retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to subscribe under the scheme irrespective of the above age limits subject to the fulfillment of other specified conditions. [Rule 2 of the Senior Citizens Savings Scheme (Amendment ) Rules, 2004]”, can you please specify these specified conditions? Iam a retired fauji, please do revert.
Can SCSS 2004 amount 15 L be re invested after completing 8 years ( 5 original + 3 Extension )
by opening a new account or SCSS is only once in life time for 8 years ?
Once the original account has been extended for a period of three years, it cannot be extended again. The account shall be closed immediately
Does it mean that this scheme can be operated for max 8 yrs period.
Is there any provision to reinvest the amount in this scheme after expiry of 8 yrs time?
The tenure of Senior Citizen Savings Scheme (SCSS) Account is five years. On maturity, the depositor can either withdraw the money by submitting an application in Form E along with the passbook or extend the account by another three years by submitting an application in Form B within one year. The extension will be from the date of maturity and not from the date of submitting the form. If the depositor doesn’t close the account on maturity or ask for an extension within a year, the account will be treated as closed. However, the maturity amount will earn interest rate applicable on post office saving account.
If you want to open a new account with the maturity amount after eight years, you are free to do so.
I have opened a SCSS account with syndicate bank on 01/02/2016 after attaining the age of 60 years. i was paid interest @9.30% on 01/04/2016 and afterwards from 01/04/2016 I am getting interest @ 8.60 % where as i have come to know that the Rate of Interest unchanged once the investor locks in the scss scheme till the scheme matures.
please guide
I invested in SCSS on 25th April 2016. I have not recd any interest till date. What should I do?
My mother opened a Senior Ciizen Savings Scheme (SCSS 2004) account in Post Office and want to take 80 C deduction on the amount invested.
My father went to SBI, Noida Sector-52 branch today and he was told that there is no 80 C deduction on investment in SCSS 2004. Even web site of ICICI bank and SBI do not state any thing on 80 C deduction for investments in SCSS 20004.
Can you please confirm me with a source that says 80 C deduction can be availed if my father invests in SCSS 2004 in SBI bank and post offices.
Thanks !
Gagan
That’s strange.
An individual who has attained the age of 60 years or above on the date of opening of a/c or an individual who attained the age of 55 years or more and who has retired under VRS/SPL. VRS, can open an account individually or jointly with spouse. A retired personnel of Defence Services (excluding Civil Defence Employees) can subscribe to the scheme irrespective of the age limit subject to fulfilment of specified conditions. Account can be closed after expiry of 5 years from the date of opening of account and account can be extended for next 3 years. Premature closure is permissible after one year subject to certain conditions. Deposits qualify for deduction u/s 80-C of Income Tax Act on the deposits made in new accounts opened on or after 8th December 2007.
Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won’t earn any further interest. Interest income is chargeable to tax.
Thank you !
Can you give me a reference web site link of any official site to confirm that
“Deposits qualify for deduction u/s 80-C of Income Tax Act on the deposits made in new accounts opened on or after 8th December 2007.”
This may help me to pass the information to SBI officials.
Gagan
Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007. from Postoffice website
I faced the same situation. SBI officials are clearly saying that SCSS doesn’t qualify for 80C. Even, I din’t find any mention of this fact in the banks’website (e.g. SBI, UCO, or others). Yes, PO website mentions it, but not any of the banks. What we should do? pls suggest.
There is a provision to extend it by another 3 years. In this case, whether this amount is eligible for deduction u/s 80C for this financial year. Or, is it required to close it and re-deposit for further 5 years in order to get deduction u/s 80C?
yes you can get exemption under 80 C only if you take the earlier deposit and redeposit. Simple extension of three years for the deposit is not eligible for 80C benefits. Only you can get that benefit for the first year.
If the Senor Citizen Saving Scheme is started as early as 2004,why the bank officials are not apprising us about the scheme.I am 70 and I have been regularly saving in Fixed Deposits with Indian Bank and Central Bank at Vizianagaram (AP) since 10 years and till today I am not aware of this scheme.Is it supposed to be a trade secret.
Am I eligible to convert my present savings to this scheme?
6-5-16 U.SRINIVAS
Sir as we know common sense is not that common. If you are above 60 years of age you can invest in SCSS any time.
Answering your question:
Is there a period prescribed for opening deposit account under the SCSS scheme, by the senior citizen, from the retirement benefits?
If the investor is 60 years and above, there is no time period prescribed for opening the SCSS account(s).
However for those below 60 years, following time limits have been prescribed.
(a) the persons who have attained the age of 55 years or more but less than 60 years and who retired under a voluntary retirement scheme or a special voluntary retirement scheme on the date of opening of an account under these rules, subject to the condition that the account is opened by such individual within three months of the date of retirement.
(b) the persons who have retired at any time before the commencement of these rules and attained the age of 55 years or more on the date of opening of an account under these rules, will also be eligible to subscribe under the scheme within a period of one month of the date of the notification of the SCSS, 2004 i.e. 27th October 2004, subject to fulfillment of other conditions. [Rule 2 of the Senior Citizens Savings Scheme (Amendment) Rules, 2004]
(c) the retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to subscribe under the scheme irrespective of the above age limits subject to the fulfillment of other specified conditions. [Rule 2 of the Senior Citizens Savings Scheme (Amendment ) Rules, 2004]
Whether the deposit holder of SCSS can take loan as against deposit?
The facility of pledging the deposit / account under the SCSS, 2004 for obtaining loans, is not permitted since the account holder will not be able to withdraw the interest amount periodically, defeating the very purpose of the scheme. (GOI letter F. No.2/8/2004/NS-II dated May 31, 2005)
For Deposit made in SCSS till 31st March 2016, will the Interest Rate Revision apply? To simplify, if I deposit today (i.e 29th March 2016), will i get 9.3% from 1st April till maturity or will the interest change on this deposit to 8.6%?
i have invested in SCSS on 05.03.16, can i again invest in scss in same month i.e. march.16, or there is any restriction that in one month only once investment can be made in SCSS
No there are no such restrictions not that we know of. Please do update us.
You can begin investing in the SCSS with a minimum amount of Rs 1,000. The maximum amount is Rs 15 lakh.
Why do you want to invest in SCSS in multiple and not in one go?
Actually, there is this restriction – “more than one account shall not be opened in the same deposit office during a calendar month”. [http://finmin.nic.in/the_ministry/dept_eco_affairs/budget/SeniorCSavingSch.pdf]
Is the interest rate on senior citizen scheme floating. i.e. if Government changes rates will new rate be applicable for that financial year or the Rate is fixed like in case of fixed deposit
Relevent portion of an article appeared in Hindu Businessline on 23.03.2015
With the new rates being aligned every year, it was interpreted that rates on small savings will change annually. However, the official clarified that the rates are fixed and not floating as far as individual investments except PPF are concerned. It means that the rate prevailing at the time of investments will remain fixed and unchanged till the maturity of the investment. Any revisions in interest rates in subsequent years will only be applicable to the investments made in the relevant period.
Hi,
Are there any restrictions on opening a SCSS, can a person have other FD’s and investments along with this account?
What happens after 8 years(including extension) to the account?
Thanks
There is no restriction on any other investments.After 8 years you can start a new account. At no point of time you can have more than 15 lac invested under the scheme
Can I deposit 15.00 lakhs in 3,4 or 5 installments in the SCSS in the bank?
Is it permissible?
Thanks.
The condition is maximum amount invested should be 15 Lac. One can have any no of account
There is source that SCSS is available with banks. But there is no source at which branch of that bank SCSS is available. please help. For example we are not able to find out at which branch of ICICI in Mumbai SCSS is available.
You can contact ICICI phone banking 9021667777.
Sir,My friend 58 yrs old recently got retired from a PSU at Mumbai.Within one month of retirement he deposited 15 L in SCSS with canara Bank. and he opened another SCSS a/c and deposited another 15 L in post office with the knowledge of the Post Master of the particular post office . I pointed him the mistake committed and my friend immediately contacted post office to cancel the scheme.post master advised nothing will happen he can continue the scheme.post master clearly said that if you cancell it will attract 1.5% as penalty. we are looking for a professional advice in this regard
Sir
You are not replied my query
Thanks,
Muraleedharan
Sorry for delay. We were looking for information and sadly could not find about multiple SCCC accounts.
From what we found out was that
Premature withdrawal or closure of the SCSS account is permitted after completion of one year from the date of opening the account after deducting a penalty for early withdrawal or closure that varies from 1-1.5 per cent depending on the completed tenure of the account.
If the account is closed after the first year and before the end of the second year, an amount equal to 1.5 per cent of the deposit shall be deducted as penalty.
If the account is closed on or after the second year, an amount equal to 1 percent of the deposit shall be deducted.
He may approach the Bank and talk about his problem. Maybe bank would be more sympathetic.
He can argue that like PPF if there are multiple accounts then the principal should be returned as no interest will accrue on the second account.
Please do keep us updated
just wanted to say…great blog and great set of replies…
thanks for keeping it alive and kicking
Thanks for encouraging words
My father opened a SCSS account and the bank made a mistake in name of the joint holder instead of writing spouse name, they have written his deceased father’s name as joint holder. We have been running pillar to post to get the name corrected but the bank says it cannot be done and we will have to wait till maturity. Can you kindly help/suggest any way by which we can get the joint name corrected or deleted.
Pl write to the Bank’s chairman or MD about your plight. They have to admit the mistake and correct the same now. or tell them you will approach Ombudsman of the bank to get your complaint redressed. or write to RBI consumer complaints cell. you will get the remedy.
Dear All,
My father is retired Primery Teacher of Maharashtra goverment, how he will gate Income proof to show income proof at Hospital for his sergery.
Regards
Milind Raut
9049248562
Andhra Bank is not giving me pass book on my SCSS A/c. How to go about ?
Secondly can we have cheque book and ATM Debit Card And Net Banking facilities ?
Can we draw interest from other Account
Say I deposit SCSS in one branch of ANDHRA Bank with instructions deposit quarterly interest in another branch of ANDHRA bank .
Regards
Please reply to
majorpjrao@gmail.com
Thanks Sir.
I want to invest Rs. 3,00,000, If I open an account of SCSS for Rs. 1,00,000 each in 3 different banks, TDS will be applicable or not ?
If you invest Rs 1,00,000 per account then your Quarterly interest would be 2325 and yearly interest 9300.
If you invest Rs 3,00,000 in one account then your Quarterly interest would be 6975.0 and yearly interest 27900.
The interest earned on the deposit is fully taxable as per senior citizen income slab. TDS can be deducted on interest earned if it exceeds the minimum limit prescribed by the Government which currently is Rs 10,000 and TDS is 10%.
By using 3 SCSS account your would be avoiding TDS but not tax.
You can open 1 account and submit form 15G/15H and TDS will not be deducted.
Thanks for the reply.
Since we are Income Tax assessee we cannot submit Form 15G/15H. So to avoid TDS, i will be opening 3 different accounts with different banks. Regarding the income tax part that is taxable and it will be included interest of all 3 deposits.
Thank you once again for your quick response. This is very good blog and it will be helpful for other citizens too.
Sir Avoiding TDS does not mean that tax on interest in SCSS is not be added to your income and not shown in income tax return.
An income tax assesse can fill form 15G/15H provided his total income from all the sources is less than the basic exemption limit which is 2.5/3 lakh.
With increase in use of technology it would be possible to find that all three accounts belong to same person, you would be submitting your PAN number right?
Can i open 2 account (1st of Rs. 2,00,000 and 2nd of Rs. 12,00,00) of SCSS in a same day in a bank?
A depositor may operate more than one SCSS account subject to the condition that deposits in all accounts taken together shall not exceed the maximum limit of Rs.15 lakhs and provided that deposits by depositors shall be restricted to the retirement benefits or Rupees Fifteen lakhs whichever is lower.
Ref:SBI Senior Citizen Savings Scheme
I wnat to know whether Form 15H is applicable for Senior Citizen Savings Scheme 2004?
Yes Sir. The depositor may furnish declaration in Form No.15 H/15G preferably at the commencement of the Financial Year for receiving interest on deposits without deduction of tax for senior citizen scheme, from PNB webpage on Senior Citizen Scheme .
My mother invested in Monthly in come scheme around Rs. 400000/- but she died. how to withdraw the amount and what are the documents required to close the account and the time limit after submission of certificates the department.
I need the form for Senior Citizen Savings Scheme 2004
For post office you can download from http://www.indiapost.gov.in/pdfForms/ApplicationFormForOpeningSCSS.pdf
What are the tax implications for self when making lumpsum investment on behalf of retired parents in SSSA?
My SCSS 2004 deposit is maturing in Aug 2015. There is a provision to extend it by another 3 years. In this case, whether this amount is eligible for deduction u/s 80C for this financial year. Or, is it required to close it and re-deposit for further 5 years in order to get deduction u/s 80C?
What is meant by Unclaimed Deposit in this statement – “If the interest payable every quarter is not claimed by a depositor, such interest do not earn additional interest” ?
In case of a joint account in the SCSS 2004 ( both above 60 years of age )
A) What is the maximum ammount that can be invested 15 Lacs or 30 laks
B) If they want to inest more than 15 Lacs which is already investd in a joint account of Husband ( primary ) do they need to open new account in the name of wife or the existing account can be used for depositing additional amount ?
C)If more than 15 lacs is allowed in the exissting account whom the interest is paid to ? . How to approportin the deposits ?
D)If the amount allowed is 30 lacs in joint account will both get inrrest separatyly or paid to Husband only ?
No clarificatin is available as per the published information both can have joint or separate accounts with investment of 15 Lacs each.
But the questioon is can tere be ajoint account with more than 15
Pimparkar
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
So a husband cannot open a SCSS for himself and his wife with his retirement money only.
Husband can open SCSS with his retirement money for amount of 15 lakh jointly with his wife.
Wife can open Senior Citizen saving scheme account with her retirement money for amount of 15 lakh in joint account with her husband.
Quoting from RBI webpage on FAQ on Senior Citizens Savings Scheme, 2004
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 / depositor is the only factor to decide the eligibility to invest under the scheme. There is no age bar/limit for the second applicant / joint holder (i.e. 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 / depositor only. As such, the question of any share of the second applicant / joint account holder (i.e. 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 )
i have deposited 12 lakhs in scss.can iwithdraw 2 lakhs out of 12 lakhs.
Premature withdrawal / closure of the deposits from the accounts under the SCSS, 2004 has been permitted after completion of one year from the date of opening of the account after deducting the penalty amount as given below.
(i) If the account is closed after one year but before expiry of two years from the date of opening of the account, an amount equal to one and half per cent of the deposit shall be deducted.
(ii) If the account is closed on or after the expiry of two years from the date of opening of the account, an amount equal to one per cent of the deposit shall be deducted.
However, if the depositor is availing the facility of extension of account under Rule 4 (3), then he/she can withdraw the deposit and close the account at any time after the expiry of one year from the date of extension of the account without any deduction. [Rule 9 (1) (a) (b) and (2)]
Premature withdrawals are allowed, unless specified otherwise, at the rate of interest applicable for the period for which the deposit has run or the contracted rate whichever is lower, subject to penalty, if any, prescribed by the bank. No interest will be paid on premature withdrawals of deposit which has remained with the bank for less than 15 days.
can spouse extend the account after the death of depositor in senior citizen scheme
As per RBI details at https://www.rbi.org.in/commonman/english/scripts/FAQs.aspx?Id=28
17. In case of a joint account, if the first holder / depositor expires before maturity, can the account be continued?
In case of a joint account, if the first holder / depositor expires before the maturity of the account, the spouse may continue the account on the same terms and conditions as specified under the SCSS Rules. However, if the second holder i.e. spouse has his / her own individual account, the aggregate of his/her individual account and the deposit amount in the joint account of the deceased spouse should not be more than the prescribed maximum limit. In case the maximum limit is breached, then the remaining amount shall be refunded, so that the aggregate of the individual account and deceased spouse’s joint account is maintained at the maximum limit. [Rules 6 (4) and 8 (3)]
18. What happens to the accounts if both the spouses are maintaining individual accounts and not any joint account and one of them expires?
If both the spouses have opened separate accounts under the scheme and either of the spouses dies during the currency of the account(s), the account(s) standing in the name of the deceased depositor/spouse shall not be continued and such account(s) shall be closed. The account can be closed by making an application in Form ‘F’. Annexures II & III to Form ‘F’ can be attested by the Oath Commissioner or Notary Public [Rule 8].
in senior citizen scheme if depositor died before maturity can spouse extend the account
what will be the rate of interest applicable in extended period of 03 years in scss
I had thought it would be the rate of interest at which SCSS is extended. But the post office I contacted said interest of when SCSS was invested in would be applicable.
Sadly googling did not offer much help. Collecting information and will update you
What are your thoughts/findings
what will be the rate of interest applicable in extended period of 03 years in scss
I had thought it would be the rate of interest at which SCSS is extended. But the post office I contacted said interest of when SCSS was invested in would be applicable.
Sadly googling did not offer much help. Collecting information and will update you
What are your thoughts/findings
see subrule(8) of rule 7(8) In case of an account, continued after maturity under sub-rule (3) of rule 4, the deposit in such
account shall earn interest at the rate applicable to the new accounts opened or to be opened under the provisions of these rules on the date of maturity.
see subrule(8) of rule 7(8) In case of an account, continued after maturity under sub-rule (3) of rule 4, the deposit in such
account shall earn interest at the rate applicable to the new accounts opened or to be opened under the provisions of these rules on the date of maturity.
Thank you.
Thank you.