Introduction: The Senior Citizen Savings Scheme (SCSS) has undergone significant updates following the November 2023 notification (SB Order No. 22/2023). This article provides a comprehensive understanding of the latest SCSS rules, covering eligibility criteria, investment options, extension of tenure, and income tax benefits.
Senior Citizen Savings Scheme (SCSS) after SB Order No.22/2023 Dated: 14.11.2023
Deduction u/s 80C under Income Tax Act, 1961 is allowed to the extent of RJs. 1,50,000/- to an individual who has crossed the following criteria of the age:
| Age | Minimum Investment | Maximum Investment |
| 60 or above |
Rs. 1000 |
Rs. 30,00,000 |
| Between 55 years to 60 years and taken voluntary retirement | Rs. 30,00,000 or Retirement benefit received (whichever is lower) | |
| 50 years or above
(Retired personnel of Defence Services except Civilian Defence Employees)* |
Rs. 30,00,000 or Retirement benefit/Death Compensation (whichever is lower) | |
| 50 years or above
(If the government employee died at the age of 50 or above in harness*) |
Some Basic Questions which need to be answered and understand as per Senior Citizen Savings Scheme Rules, 2019 (Covered the latest amendment November 2023)
|
Form No. |
Question | Answer | ||
| Form-A
(Application) |
Who can open account under SCSS? | A Resident Individual Independently or Jointly with Spouse | ||
| Lock in Period | Yes, for the period of 5 years (without penalty) however it can be prematurely withdrawn with the penalty of 1% on deposit. | |||
| Form-B
(Extension of tenure) |
Maximum Tenure of deposit under SCSS | Yes, deposit can be extended for further block of 3 years subject to application of extension is submitted but here it is to be noted that depositor shall earn interest at the rate applicable for the new accounts on the date of maturity.
Gist: Hence, 3 years extension is beneficial in those cases where the interest rate is higher than or equal to the interest rate which was applicable on the 1st day of opening of the SCSS Account. |
||
| Can deposit be made annually or multiple times? | Yes, it can be made multiple times subject to the threshold limit of Rs. 30,00,000. | |||
| Can we make deposit in cash as well as bank/online transfer? | Yes, but there is a threshold limit of Rs. 1,00,000 if we deposit in cash however there is no limit if deposit is made through bank/online transfer. | |||
| Form-C (Nomination Form) | Whether Nomination is mandatory? | > Yes, otherwise withdrawal from the SCSS is not possible however Nomination can be changed by the depositor.
> Joint Account with spouse: In case of death of a joint holder, the other joint holder is entitled to get the amount receivable. However, spouse will get the power to change the nomination. |
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| Interest on Deposit | Presently Interest Rate is notified @8.20% per annum. It is varied by Government through notification.
(The highest interest rate was 9.30% during the financial year 2012-2013) |
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| Interest is payable on Quarterly Basis | Quarter wise | Payment credited in account on | ||
| 1st January to 31st March | 1st working day of April | |||
| 1st April to 30th June | 1st working day of July | |||
| 1st July to 30th September | 1st working day of October | |||
| 1st September to 31st Dec | 1st working day of January | |||
| Transfer of SCSS Account | Yes, transfer is permissible with some transfer fee. | |||
| Whether Premature withdrawal is permissible | Yes, depositor can withdraw the amount after paying penalty of 1% on deposit. | |||
| Form-D | Issuance of Passbook with the specified details | 1. Name and Address of Depositor(s)
2. Number of Account 3. Date of Opening of Account 4. Amount Deposited 5. Due Dates of Interest Payment 6. Maturity Date of Deposit |
||
| Form-E
(Withdrawal Form) |
Premature Closure of Account | Premature Period | Penalty | |
| 0-5 years | 1% of Deposit | |||
| Closure of Account | After the expiry of 5 years, account can be closed by filing Form-E. | |||
| Form-F | Death of Depositor | Single Account: Account shall be closed and amount shall be refunded to the nominee/legal heir.
Joint Account: Account can be continued by the joint holder till maturity or there is an option to close the account. |
||
| Income Tax | Whether the interest received on SCSS Account is exempt or taxable | Interest receipt on such deposit is exempt to the extent of Rs. 50,000 | ||
Conclusion: Stay informed about the latest SCSS rules, providing senior citizens with a secure and beneficial investment avenue. Explore eligibility, deposit options, and tax benefits to make informed financial decisions in alignment with the updated guidelines.
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whether it is exempt u/s 10(15)(iv)(i)