This senior citizen scheme provides more than Rs 4 lakh return and tax benefits on one-time investment; know how
The Senior Citizen Savings Scheme (SCSS): Accounts can be opened individually or jointly with a spouse, starting from Rs. 1,000 in multiples thereof, up to a maximum of Rs. 30 lakh per individual. Excess deposits are promptly refunded, with only Post Office Savings Account interest applicable for the excess period.
The Senior Citizen Savings Scheme (SCSS) offers competitive returns for individuals aged 60 and above, retired civilian employees aged 55 to 60, and retired defense personnel aged 50 to 60. The scheme guarantees an annual interest rate of 8.2%, paid quarterly from the deposit date with subsequent payments on 1st April, 1st July, 1st October, and 1st January.
Opening and Deposit Limits
Accounts can be opened individually or jointly with a spouse, starting from Rs. 1,000 in multiples thereof, up to a maximum of Rs. 30 lakh per individual. Excess deposits are promptly refunded, with only Post Office Savings Account interest applicable for the excess period.
Key Features
Interest Payment: Quarterly interest accrues from the deposit date to specific periods (31st March, 30th June, 30th September, 31st December). Unclaimed interest does not accumulate further.
Tax Benefits: SCSS deposits qualify for Section 80C benefits under the Income Tax Act, 1961.
Premature Closure: Accounts can be closed prematurely with deductions based on closure timing relative to the account opening date.
Maturity and Extensions: After five years, accounts can be closed or extended for three more years, earning interest at prevailing rates.
What will be the return in 5 years if Rs 5 lakh is invested in the Senior Citizen Savings Scheme?
If you invest Rs 5 lakh in the Senior Citizen Savings Scheme, you can expect a return of Rs 7,05,000 after 5 years.
What will be the return in 5 years if Rs 10 lakh is invested in the Senior Citizen Savings Scheme?
Investing Rs 10 lakh in the Senior Citizen Savings Scheme would yield a return of Rs 14,10,000 over a period of 5 years.
Tax Implications
Interest exceeding Rs. 50,000 annually across all SCSS accounts is taxable, subject to TDS deduction unless Form 15G/15H is submitted.
The SCSS provides financial stability for seniors and offers a tax-efficient savings avenue. Understanding these details empowers informed financial decisions.
For further information, visit your nearest post office or check online resources for comprehensive guidance on the Senior Citizen Savings Scheme.
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