Introduction: The Ministry of Finance, through the Department of Economic Affairs, has introduced significant amendments to the Senior Citizen’s Savings Scheme 2019. This notification, G.S.R. 829(E), dated 7th November 2023, outlines the Senior Citizen’s Savings (Fourth Amendment) Scheme, 2023. In this article, we will dissect the key changes, including alterations in eligibility criteria, extension rules, and withdrawal conditions.
1. Scheme Name and Commencement: The amended scheme is titled the “Senior Citizen’s Savings (Fourth Amendment) Scheme, 2023” and came into force from 7th November, 2023.
2. Change in Eligibility Criteria: Amendments in paragraph 3 of the Principal Scheme redefine eligibility. Individuals aged fifty-five or more but less than sixty years, who have retired on superannuation or otherwise, can open an account within three months from the date of receiving retirement benefits. Notably, the spouse of a government employee who has died in harness is also eligible under certain conditions.
3. Definition of Retirement Benefits: The explanation under paragraph 4 clarifies that “retirement benefits” include various payments due to the account holder on account of retirement, superannuation, or death. This encompasses Provident Fund dues, gratuity, pension commutation, and other related benefits.
4. Interest Rate for Extended Accounts: In paragraph 5, sub-paragraph (7) stipulates that in the case of an account extended after maturity, the deposit shall earn interest at the rate applicable to the Scheme on the date of maturity or on the date of extended maturity.
5. Deduction for Early Closure: Paragraph 6 introduces a new clause (iv), stating that if the account is closed before the expiry of one year from the date of extension, one percent of the deposit will be deducted, and the balance will be paid to the account holder.
6. Changes in Withdrawal Procedure: Paragraph 7 outlines modifications in the withdrawal procedure. The deposit made at the time of opening the account can be withdrawn after the expiry of five years or after each block period of three years. New accounts can be opened after closure, subject to the maximum deposit limit.
7. Extension Rules: In paragraph 8, new sub-paragraphs are introduced, allowing account holders to extend their accounts for a further block period of three years by applying within one year from the date of maturity. The extension is deemed to occur from the date of maturity or the end of each block period, irrespective of the application date.
Conclusion: The Senior Citizen’s Savings Scheme Amendments 2023 bring about significant changes in eligibility, withdrawal, and extension rules. These amendments aim to provide more flexibility and benefits to senior citizens and their spouses. Individuals planning to avail themselves of this scheme or currently holding accounts under the scheme should carefully review the changes to ensure compliance and maximize the benefits offered by the amended scheme. As the Department of Economic Affairs continues to refine financial schemes, staying informed about such amendments becomes crucial for individuals planning their financial portfolios.
MINISTRY OF FINANCE
(Department of Economic Affairs)
New Delhi, the 7th November, 2023
G.S.R. 829(E). — In exercise of the powers conferred by section 3A of the Government Savings Promotion Act, 1873 (5 of 1873), the Central Government hereby makes the following Scheme to further amend the Senior Citizen’s Savings Scheme, 2019, namely:—
1. (1) This Scheme may be called the Senior Citizen’s Savings (Fourth Amendment) Scheme, 2023.
(2) It shall come into force on the date of its publication in the Official Gazette.
2. In the Senior Citizen’s Savings Scheme, 2019 (herein after referred to as the Principal Scheme), in paragraph 3, in sub-paragraph (1), for clause (ii) and the proviso, the following shall be substituted, namely:—
“(ii) who has attained the age of fifty-five years or more but less than sixty years, and who has retired on superannuation or otherwise on the date of opening of an account under this Scheme, subject to the condition that the account is opened by such individual within three months from the date of receipt of the retirement benefits and proof of date of disbursal of such retirement benefits along with a certificate from the employer indicating the details of retirement on superannuation or otherwise, retirement benefits or admissible financial assistance to an eligible government employee who died in harness, employment held and period of such employment with the employer, is attached with the application form:
Provided that the retired personnel of Defence Services (excluding Civilian Defence employees) shall be eligible to open an account under this Scheme on attaining the age of fifty years subject to the fulfilment of other specified conditions.
Provided further that the spouse of the government employee shall be allowed to open an account under this Scheme, if the government employee who has attained the age of fifty years and has died in harness, subject to the fulfilment of other specified conditions.
Explanation:— For the purposes of this proviso, the Government Employee includes all Central and State Government employees eligible for retirement benefit or death compensation.”
3. In the Principal Scheme, in paragraph 4, for Explanation, the following Explanation shall be substituted, namely:—
‘Explanation.— For the purposes of this sub-paragraph, “retirement benefits” means any payment due to the account holder on account of retirement on superannuation or otherwise and includes Provident Fund dues, retirement or superannuation or death gratuity, commuted value of pension, cash equivalent of leave, savings element of Group Savings Linked Insurance Scheme payable by the employer on retirement, retirement-cum-withdrawal benefit under the Employees’ Family Pension Scheme and ex-gratia payments under a voluntary or a special voluntary retirement scheme and in case, if the employee died in harness, the “retirement benefits” shall also mean the above mentioned benefits to employee who died in harness.’.
4. In the Principal Scheme, in paragraph 5, for sub-paragraph (7), the following sub-paragraph shall be substituted, namely:—
“(7) In case of an account extended after maturity under sub-paragraph (1) of paragraph 8, the deposit in such account shall earn interest at the rate applicable to the Scheme on the date of maturity or on the date of extended maturity.”.
5. In the Principal Scheme, in paragraph 6, in sub-paragraph (1) after clause (iii), the following clause shall be inserted, namely:—
“(iv) In case the account is closed before expiry of one year from the date of extension as mentioned in subparagraph (2), an amount equal to one per cent. of the deposit shall be deducted and the balance shall be paid to the account holder.”.
6. In the Principal Scheme, in paragraph 7,—
(a) for sub-paragraph (1), the following shall be substituted, namely:—
“(i) The deposit made at the time of opening of account shall be paid on or after the expiry of five years or after the expiry of each block period of three years where account was extended under paragraph 8 from the date of opening of account, on an application made in Form-3:
Provided that after closure of the existing account or accounts, new account or accounts may be opened again as required by the depositor subject to the maximum deposit limit as mentioned in sub-paragraph (1) of paragraph 4.”;
(b) In sub-paragraph (2), for the second proviso, the following proviso shall be substituted, namely:—
“Provided further that in case of a joint account, or where the spouse is the sole nominee, the spouse may continue the account by applying to the accounts office, on the same terms and conditions as specified under this Scheme, if the spouse meets eligibility conditions under the Scheme on the date of death of the account holder.”.
7. In the Principal Scheme, in paragraph 8,—
(a) For sub-paragraphs (1) and (2), the following sub-paragraphs shall be substituted, namely:—
“(1) The account holder may extend the account for a further block period of three years by making an application in Form-4 within a period of one year from the date of maturity or from the date of end of each block period of three years.
(2) The extension of the account under sub-paragraph (1) shall be deemed to have been made from the date of maturity or from the date of end of each block period of three years, irrespective of the date of application.”;
(b) In sub-paragraph (3), for the words “only once”, the words “in block period of three years” shall be substituted.
[F. No. 1/4/2023-NS(Pt.)]
ASHISH VACHHANI, Addl. Secy.
Note : The Principal Scheme was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G. S. R. 916(E), dated the 12th December, 2019 and subsequently amended vide number G.S.R. 287 (E), dated the 5th May, 2020, G.S.R. 842(E), dated the 23rd November, 2022, G.S.R. 56(E), dated the 27th January, 2023, G.S.R. 240 (E), dated the 31st March, 2023 and G.S.R. 326 (E), dated the 27th April, 2023.