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It has been proposed to exempt the senior citizens from filing income tax returns if pension income and interest income are their only annual income source. Section 194P has been newly inserted to enforce the banks to deduct tax on senior citizens more than 75 years of age who have a pension and interest income from the bank.
The Senior Citizens Savings Scheme (SCSS) is primarily for the senior citizens of India. The scheme offers a regular stream of income with the highest of safety and tax saving benefits. It is an apt choice of investment for those over 60 years of age.
A Senior Citizens’ Saving Scheme (SCSS) is a government-backed retirement benefits programme. Senior citizens resident in India can invest a lump sum in the scheme, individually or jointly, and get access to regular income along with tax benefits.
Senior Citizens’ Saving Scheme is one of the Post Office savings schemes. You can open an account under SCSS in the Post Office like you can open it in any authorised bank. Like any other Post Office saving schemes, you can visit the nearest Post Office branch or the branch where you hold a savings account to open the SCSS account. Check the eligibility criteria and the features of the scheme before opening the account.
A Senior Citizens’ Saving Scheme (SCSS) account is an account that offers retirement benefits and is backed by the Government of India. Senior citizens residing in India can avail the benefits of the account by investing a lump sum in the scheme, either individually or jointly. The account will provide access to regular income post-retirement along with income tax benefits.
Please note that you can make the deposit to the account in a single payment. Therefore, an account holder may operate more than one account under the scheme subject to the condition that the deposits in all the accounts taken together shall not exceed the maximum limit, i.e. Rs.15 lakh. Also, more than one account shall not be opened in the same deposit branch during a calendar month.
Here is how an SCSS account works:
The following banks offer SCSS:
Along with these banks, the Post Office also offers SCSS.
Resident individuals who satisfy the following criteria can invest in SCSS:
Here are a few reasons on why you should invest in SCSS:
The maximum amount you can invest in the SCSS account is up to Rs.15 lakh.
The current interest rate applicable to SCSS is 7.4% p.a. This interest rate is applicable from 1 July 2021 until 30 September 2021.
You can open an SCSS account either at an authorised bank branch or at a Post Office branch. If the bank allows, you can open the SCSS account online on the bank’s internet banking portal or mobile banking app. There is no option to open the SCSS account online with the Post Office.
As of now, there is no option for you to open an SCSS account online. Neither do the authorised banks nor the Post Office provides you a platform to open the account online. Please follow the steps provided above to open the account offline.
Step 1: Visit the nearest SBI branch or the SBI branch with which you have a savings account.
Step 2: Request for the application form and fill up the relevant details in the form.
Step 3: Attach the supporting documents with the application form, such as the employer’s letter stating the retirement benefits you have received.
Step 4: Submit the documentation and the deposit amount to the SBI personnel.
Step 5: The personnel from SBI will process your application and the payment received. Once the payment is processed, the SCSS account will be created.
You can collect the SCSS application form either at the Post Office branch or on the official website of the Post Office. The process of filling the application form is:
Step 1: Visit the nearest ICICI Bank branch or the ICICI Bank branch where you have a savings account.
Step 2: Request for the application form and fill up the form with your personal details.
Step 3: Submit the application form with supporting documents as well as the deposit amount in cash or cheque to the bank personnel.
Step 4: The personnel from ICICI Bank will process your application and the payment received. Once the payment is processed, the SCSS account will be created.
To sum it up, SCSS is a very good scheme for senior citizens who want a decent risk free return on a corpus fund. At 7.4% p.a. interest rate and an investment amount of Rs.15 lakh, the monthly income is stated to be Rs.9,250 per month for each investor.