Government Scheme: Whenever we talk about zero risk and guaranteed returns, the first thing that comes to mind is the Small Savings Schemes of the Post Office. The specialty of these schemes of the government is that it has products for the financial needs of every age group.
Government Scheme: Whenever there is talk of zero risk and guaranteed returns, the first thing that comes to mind is the Small Savings Schemes of the Post Office. The specialty of these schemes of the government is that it has products for the financial needs of every age group. In these schemes, neither money is lost, nor is there any tension of market fluctuations. One of these small savings schemes of the post office is the Senior Citizen Savings Scheme (SCSS). A maximum of 15 lakhs can be deposited in this scheme. At present, the government is paying 7.4 percent annual interest in this scheme.
15 lakh will make 20.55 lakh
If you invest a lump sum of Rs 15 lakh in the Senior Citizens Scheme, the total amount after 5 years i.e. on maturity will be Rs 20,55,000 at an interest rate of 7.4 per cent (compounding) per annum. This means that here you are getting the benefit of Rs 5.55 lakh as interest. In this way, every quarter interest will be Rs 27,750.
According to the information available on the post office website, the interest in this scheme will be 7.4 percent per annum. The maturity period in this scheme is 5 years. Deposits can be made in multiples of Rs 1000. Also, a maximum investment of Rs 15 lakh can be made in this. It has to be invested in lump sum.
Who can open account
According to the website, a person who is 60 years of age or above can open an account under SCSS. If someone is 55 years or more but less than 60 years old and has taken VRS, then he can also open an account in SCSS. The condition is that he has to open this account within one month of receiving the retirement benefits and the amount to be deposited in it should not exceed the amount of retirement benefits.
Under SCSS, a depositor can hold more than one account either individually or jointly with his/her spouse. But all together the maximum investment limit cannot exceed 15 lakhs. With an amount less than 1 lakh, the account can be opened in cash, but for more than that, cheque will have to be used.
Tax deduction benefits
Tax deduction is available on deposits in this account. Deduction can be claimed up to Rs 1.5 lakh under section 80C of the Income Tax Act. However, income from interest in SCSS is taxed. If all your SCSS interest income exceeds Rs 50,000 per annum, then your TDS is deducted. 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.
SCSS: Some Other Features
- 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 holder 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.
- After the maturity of SCSS, the account can be extended for another three years. For this, the application has to be submitted within one year from the date of maturity.
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