When the Senior Citizens Savings Scheme (SCSS) came into existence, its main intention was to provide Indian seniors with a regular income when they reached the age of 60. The scheme offers a secure way to invest in the plan, early withdrawal facility and is feasible to transfer the account nationwide.
In India, senior citizens are usually financially unstable which leads to their low quality of life. A huge population above 60 years of age is struggling to meet their daily needs such as medicines and food due to lack of income and financial instability. To overcome this problem, the Government of India has initiated the Senior citizen savings scheme to help the elderly people stay financially strong.
What is the Senior Citizen Savings Scheme?
Senior Citizen Savings Scheme is a saving plan for senior citizens in India to provide them financial security. It was introduced by the government of India in 2004. The plan offers an 8.20% interest rate every quarterly on the deposited amount. The SCSS account holders can invest for 5 years with the investment of Rs. 1000 to Rs. 30 lakhs. Government has initiated this scheme with the aim of providing regular income, tax benefits and various other financial support to the senior citizens of the country.
Benefits of Senior Citizen Savings Scheme
The benefits of Senior Citizen Savings Scheme (SCSS) are as follows:
- It is easy to open a SCSS account at any post office or approved bank in the country.
- Since SCSS is a government-backed investment scheme, it is considered secure and reliable.
- The scheme offers a high rate of interest.
- The SCSS account has a five-year term, which can be further extended for three years.
- The account can be shifted to any part of the country.
- Up to Rs. 1.5 lakh income tax deductions are permissible under Section 80C of the Indian Tax Act 1961.
How to Open a Senior Citizen Savings Scheme Account for Senior Citizens?
You may open a SCSS account in a post office or a bank. The following steps describe how to open an Senior Citizen Savings Scheme account:
- Visit the bank or post office nearest to you.
- Along with the Know Your Customer (KYC) documents, submit the application.
- A check for the amount being deposited is required to be shown.
- Nominees can be placed on the account.
Senior Citizen Savings Scheme Eligibility
The Senior Citizen Savings Scheme eligibility conditions are:
- A person who, upon opening a SCSS account, is 60 years or above.
- An SCSS account may be opened by a person who is 55 years or above but below 60 and retired on superannuation.
- The scheme is open to all who have attained the age of 55 and who retired before SCSS rules came into place.
- It is not feasible for non-resident Indians (NRIs) to open a SCSS account.
- It is likewise not feasible for Hindu Undivided Families (HUF) to open a SCSS account.
Senior Citizen Savings Scheme Interest Rate
The current SCSS rate of interest is 8.20% p.a. Compared to savings and Fixed Deposit (FD) accounts, the SCSS is highly rewarding. In the former case, interest is payable on March 31, September 30, and December 31 for deposits; in the latter case, interest is payable on March 31, June 30, September 30, and December 31.
The first working day of January, April, October, and July is when there is quarterly payment of interest. But only Core Banking-enabled post offices are paid quarterly interest.
What is the Procedure for the Senior Citizen Savings Scheme?
The details of how SCSS works are as under:
- Open a SCSS account and deposit Rs. 1000 to Rs. 30 lakh in one installment.
- Once the employer’s retirement benefit is received, the funds have to be deposited within a month.
- The retirement benefit includes the following and is any payment due to the account holder on superannuation or otherwise on account of retirement.
- Superannuation or retirement gratuity
- Leave encashment
- Retirement and withdrawal benefits under the Employees’ Family Pension Plan
- Ex-gratia benefits under a special or voluntary retirement plan
- Provident fund obligations
- Calculated pension value
- Employer-funded savings portion of the Group Savings Linked Insurance Plan at retirement
- In case the deposit exceeds the limit, the surplus will be immediately refunded to the account holder.
- Interest would be remitted to the account holder every three months.
- Electronic Clearing Service or post office auto credit are two options to withdraw the interest.
- At any time after the date of opening the account, it can be closed prematurely.
- The account can be extended for another three years after the maturity date.
- The account can be extended in one year after the maturity date of the account.
Documents Required to Open an Account with Senior Citizen Savings Scheme
The documents that individuals must provide in order to open a Senior Citizen Savings Scheme account are as follows:
- Two passport photographs.
- Form A must be completely filled and mailed in.
- Identification documents must be submitted, such as a passport or Permanent Account Number (PAN) card.
- Address proof, such as an Aadhaar card or telephone bill, must be shown by the individual.
- A document verifying the age of the person must be submitted. Passport, voter ID, birth certificate, senior citizen card, or Permanent Account Number (PAN) card can be used as age proof.
Features of Saving Scheme for Senior Citizen
The following enumerates Senior Citizens Savings Scheme’s main features:
- Scheme maturity: The scheme matures in five years. However, by submitting an application in the correct fashion within a year of the maturity date of the account, users can extend the maturity date by three more years. But once the account expires, it can be closed without any charges.
- Nominations: Nominations can be made to the policy during the account opening process or even post-opening of the account.
- Number of accounts: Individuals can open a joint account with their spouse or handle numerous accounts individually.
- Minimum and maximum value: There can be only one deposit in the account. The maximum value that can be deposited is Rs. 30 lakh, and it can be in the form of a multiple of Rs. 1,000. There can be cash payments for amounts under Rs. 1 lakh, but a check is mandatory for deposits over Rs. 1 lakh. If the check is realized, the account will open on the same day.
- Transfer of account: A SCSS account can be transferred from a post office to a bank and vice versa. Also, the process of opening a SCSS account is easy and convenient.
- Early withdrawal: An early withdrawal is allowed up to a year from when the account was opened.
Advantages of taxation under Senior Citizen Savings Scheme
Investments up to Rs. 1.5 lakh can be claimed as tax deduction by individuals under Section 80C of the Income Tax Act, 1961. At the source, tax will be deducted if earnings from interest are more than Rs. 10,000 per year.
How to Fill the Post Office Senior Citizen Savings Scheme Application Form?
If you wish to open an account in the post office, use the following procedure to fill in the (SCSS) Senior Citizen Savings Scheme application form:
- Insert the name of the branch here.
- You need to insert the account number in case you hold a post office savings account.
- Insert the post office address here.
- The account holder’s name needs to be entered.
- If you want to open a savings account, you have to complete the following section.
- Choose the type of account holder.
- Choose the type of account.
- You have to put information regarding the amount being deposited in this field.
- Put the information of the account holder or account holders.
- Choose whatever documents you want to send.
- In the following box, put the details of the nominee.
How to Open a Bank Account for Senior Citizen Savings Scheme?
The process to open a bank account for SCSS is as follows:
Step 1: Visit the nearest branch of the bank (SCSS list).
Step 2: Request an application and complete the required fields.
Step 3: Enclose with your application any supporting evidence that is required, such as an employer’s letter attesting to your receipt of pension or retirement benefits.
Step 4: Give the bank employees the required documentation and make the deposit.
Step 5: The bank personnel will process your application and payment. After payment processing, the SCSS account will be opened.
How to Finish the Post Office Senior Citizen Savings Scheme Application?
To fill out the Post Office SCSS application form, you should:
- Type in the name of the Post Office branch.
- If you already have a Post Office savings account, give the account number.
- In the “To” space, type in the Post Office branch address.
- Paste the account holder’s photograph.
- Enter the account holder’s name and choose the SCSS option.
- Select any one of the facilities listed in the “Additional Facilities Available” column only if you are applying to open a savings account.
- Select the account holder type: self, minor under guardianship, or person of unsound mind under guardianship.
- Select the type of account, i.e., all, survivor, or single.
- Enter the amount of deposit in words and figures.
- If deposit is made through check, fill in the check number and date.
- Enter the account holder’s personal details.
- For the documents you have forwarded as requested, tick the boxes at the end of the table.
- Fill in the SCSS details and mark the declaration box.
- The account holder has to sign page one and page two.
- Fill in the nominee details and obtain the account holder’s signature to verify the details filled.
Conclusion
Senior Citizen Savings Scheme is the best option for the senior citizens to invest and secure their financial conditions when they reach 60 years of age. The eligible candidates can apply under the scheme and leverage the benefits of the Sr Citizen Savings Scheme. The application process of the plan is very simple dn can be done with a few simple steps. The candidates get good interest rates and various benefits.
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FAQs
1. Can a SCSS account be extended?
Yes, a holder can extend his/her SCSS for another three years within a year of its maturity.
2. Does TDS go to the SCSS scheme?
Yes, the TDS shall be applicable when the interest paid is more than Rs. 10,000 per year. Interest payments do not qualify under the source tax deduction under the scheme.
3. Is it possible to transfer a SCSS account to another deposit office?
An account can be transferred from one deposit office to another by using Form G.
4. Is there a permissible income tax exemption or refund?
No, not under this plan.
5. Is it possible for both couples to open separate accounts?
In fact, even individual accounts are possible, as long as the highest amount deposited is Rs. 15 lakh. It needs to, however, adhere to the scheme guidelines.
