Senior Citizens Saving Scheme

rnThe Senior Citizens Savings Scheme (SCSS) is the most sought after post retirement investment avenue, proving to be the best monthly income for senor citizens. The SCSS helps senior citizens, over the age of 60 years, park their retirement corpus in return of regular income, highest safety and tax savings. Post retirement, people are hesitant to put life long savings in investments such as equities, which are risky, or have a long lock-in period or don't offer any income till maturity. rnThis is where SCSS comes in, with the following features:rnSCSS offers capital protection. It is backed by the government and, therefore, offers a sovereign guarantee.rnAny individual aged 60 and above can invest in it. Retired defence personnel are allowed to invest after the age of 50 years. However, non-resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not allowed to invest in SCSS.rnSCSS account can be opened singly or jointly.rnSCSS offers quarterly interest payment as a source of income. The current interest rate is 8.3%.rnSCSS account can be opened with any post office or scheduled commercial bank.rnMultiple accounts can be opened under the SCSS. However, the total amount in all accounts must not exceed the maximum limit of Rs. 1.5 Lac.rnThis scheme requires minimal and basic documentation, with Aadhaar and PAN being absolutely mandatory for opening an SCSS account.rnThe maximum amount that can be invested is Rs. 15 Lac or the amount received as a retirement benefit, whichever is lower.rnNomination facility is available free of charge by submitting the duly filled nomination form. Tax Saving Schemes for Senior Citizens Senior Citizen Saving Scheme is one of the best tax saving investment scheme for the elderly because SCSS investment is eligible for deduction under Section 80C of the Income-tax (I-T) Act, subject to a maximum limit of Rs. 1.5 Lac. Tax Saving in SCSS has the following conditions:rnThe benefit is available from the financial year in which the deposit is made.rnNo additional benefit is provided under Section 80C for the extension of an existing account after five years.rnThe 80C benefit is lost if amount is withdrawn prematurely. The principal amount withdrawn and the interest earned in the year of withdrawal is added to the depositor’s gross total income in the year of the premature withdrawal. rnPremature withdrawal made by the nominee or legal heirs is not taxable in the event of the death of the depositor. But, any interest paid after the demise of the depositors is taxable.