Tax Benefits of Senior Citizen Saving Scheme

The Senior Citizen Savings Scheme (SCSS) is a government-backed savings scheme in India designed specifically for senior citizens. It provides monthly and periodically assured and regular income to senior citizens. Age considered for eligibility under this scheme is 60 years.

Senior Citizen Savings Scheme:
This is a retirement programme for senior citizens backed by government. This is a post office savings scheme. It can be opened at any post office or authorised banks. Investment in SCSS can grant various tax benefits and an assured monthly regular income.

Details of SCSS:

Following are the features of SCSS:

• It is opened for 5 years.
• Minimum Investment amount is Rs. 1,000 
• Maximum Investment amount is Rs. 3,00,000 as per Budget update of 2023.
• Applicable interest rate is 8.2% p.a. 

Benefits of opening a SCSS:

Following are some of the benefits of this scheme:

• The most important tax benefit of SCSS is the amount invested in this scheme is allowed as a deduction under Section 80C for an amount of Rs. 1,50,000.
• It offers attractive interest rates.
• This is a government backed investment option and considered as safe and reliable.
• This account is transferable and period can also be extended for three more years from five years.

Under Section 80C of the Income Tax Act, 1961, individuals are eligible for tax deductions on investments up to Rs.1.5 lakh. If the total interest in all SCSS accounts exceeds Rs.50,000 p.a., TDS will be deducted. is a savings scheme designed specifically for senior citizens of India who are 60 years of age or above. However, some eligible individuals who have attained the age of 55 years or more but less than 60 years and have retired under a voluntary or special voluntary retirement scheme can also invest in the SCSS. In addition, individuals above 50 years of age and below 60 years of age who have retired from the defence services on superannuation or under a voluntary retirement or special voluntary retirement scheme can invest in the SCSS within three months of receiving retirement benefits.

How does an SCSS Works?

SCSS is an investment option designed for citizens above the age of 60 or in some case above 55 years. Let us understand how does this work:

• Firstly, an SCSS account needs to be opened in post or any authorised bank after submitting documents
• A lumpsum investment is made ranging from Rs.1,000 to Rs.30,00,000.
• Account can be opened individually or jointly
• Quarterly interest calculations are done and the same is credited to account.
• At the end of the maturity period or extended tenure, you can close the SCSS account and receive the remaining principal amount along with any accrued interest.

Conclusion:
SCSS is one of the safest, high interest paying and medium duration investment savings plan backed up by government. This provided tax benefits under section 80C whereas its interest being taxable as per the available slab rates. Considering your age of investment post 60 years, it is considered as the safest option to invest a decent amount of your corpus since it provides monthly payouts.