Post Office Scheme: Keeping in view the needs of every age group, there is an option to invest in post office schemes. One of these schemes is the Senior Citizen Savings Scheme (SCSS) of the Post Office. Under SCSS, an account can be opened by a person of 60 years of age or more.
Post Office Scheme: Small savings schemes of the post office have always been a better option for investment. The best thing about this is that the deposit is completely safe with guaranteed returns. These investments are not affected by market fluctuations. There is an option to invest in post office schemes keeping in view the needs of every age group. One of these schemes is the Senior Citizen Savings Scheme (SCSS) of the Post Office. Under SCSS, an account can be opened by a person of 60 years of age or more. The maturity period in this scheme is 5 years.
20.55 lakh will be available on 15 lakh deposit
According to the Post Osis website, if senior citizens invest Rs 15 lakh in lump sum in the scheme, the total amount after 5 years i.e. at maturity will be Rs 20.55 lakh at an interest rate of 7.4 per cent (compounding) per annum. Guaranteed interest of Rs 5.55 lakh will be available in 5 years. In this way, every quarter interest will be Rs 27,750.
SCSS: Who can open an account
In the Senior Citizen Savings Scheme of the post office, the interest rate is 7.4 percent per annum at present. The maturity period in this scheme is 5 years. Deposits can be made in multiples of Rs 1000. A maximum investment of Rs 15 lakh can be made in this. It has to be invested in lump sum.
Under SCSS, an account can be opened by a person of 60 years of age or more. If someone is 55 years old or more but less than 60 years old and has taken VRS then he can also open an account in SCSS. But the condition is that he has to open this account within one month of receiving the retirement benefits and the amount deposited in it should not exceed the amount of retirement benefits.
There is an option to extend the scheme
The account can be extended for another three years after the maturity of SCSS. For this, the application has to be submitted within one year from the date of maturity. Tax deduction is also available on deposits in this account. Investment in this scheme is exempted under section 80C of the Income Tax Act.
Income from interest in SCSS is taxed. If the interest income of all your SCSS exceeds Rs 50,000 per annum, then your TDS starts deducting. The tax amount is deducted from your interest. If the interest income does not exceed the prescribed limit, then you can get relief from TDS by submitting Form 15G/15H.
Special Features of SCSS
- Under SCSS, a depositor can hold more than one account either individually or jointly with his/her spouse. But all in all, the maximum investment limit cannot exceed 15 lakhs.
- Accounts can be opened in cash with an amount less than 1 lakh but for more than that, checks have to be used.
- Nomination facility is available at the time of opening and closing the account in Senior Citizen Savings Schemes.
- This account can be transferred from one post office to another.
- In this, account holders can do premature closure. But the post office will deduct 1.5 percent of the deposit only on closing the account after 1 year of account opening, while 1 percent of the deposit will be deducted after 2 years of closure.
