SCSS: Rs 10,00,000 investment in this senior citizen savings scheme can give you Rs 82,000 annual income for 5 years

Senior Citizen Savings Scheme (SCSS): Post retirement is a time when the income source of an individual often depletes while their expenses remain intact. They need money for their monthly expenses, while they also need an income source that will also help them meet their medical expenses. It is better if one doesn't have to depend on anyone to bear these expenses. If one plans their retirement by investing regularly in their young days, saving for old age, and reinvesting it in a scheme that can give them a regular income. One such scheme that helps senior citizens get a regular income is Senior Citizen Savings Scheme (SCSS).

In the scheme, a one-time Rs 10 lakh investment can help you earn Rs 20,500 per quarter, or Rs 82,000 annually.

Know the basics of the scheme before moving on to calculations.

What is Senior Citizen Savings Scheme (SCSS)? 

It is a small savings, guaranteed return scheme run by the post office, where senior citizens get 8.20 per cent yearly interest.

The non-market-linked scheme has a lock-in period of five years, where one makes a one-time investment to get a quarterly income in the form of interest.

The minimum deposit in the scheme is Rs 1,000 and in multiples of Rs 1,000, while the maximum deposit is Rs 30 lakh. 

One of the advantages of investing in SCSS is that deposits up to Rs 1.50 lakh in a financial year provide tax benefits under Section 80C of the Income Tax Act, 1961.

Any individual above 60 years of age, a retired civilian employee above 55 years of age and below 60 years of age, and retired defence employees above 50 years of age and below 60 years of age can open their SCSS account.

One gets the interest on a quarterly basis, applicable from the date of deposit to March 31/June 30/September 30/December 31.
Interest earned is taxable if it exceeds Rs 50,000 in a financial year. TDS at the prescribed rate will be deducted from the total interest paid.  

How to get Rs 82,000 yearly income through SCSS

For that, a senior citizen needs to make a one-time investment of Rs 10 lakh.

With that investment, they will get a quarterly interest of Rs 20,500.

In four quarters, that will amount to Rs 82,000. They will get their principal amount back on the maturity of the scheme.

Quarterly income on Rs 30 lakh investment

Since one can make a maximum of Rs 30 lakh investment under the scheme, with that amount, they will get a quarterly interest of Rs 61,500. In four quarters, they will get a total of Rs 12,30,000 just as interest. On maturity, they can get back their principal amount of Rs 30 lakh.