Senior Citizens Saving Scheme (SCSS Scheme) accounts are available to anyone over 60, 55 for retirees on superannuation, under a voluntary or special voluntary scheme, or 50 for retired members of the armed forces (with the exception of civil defence staff). Under this scheme, depositors are permitted to open several accounts, with a total maximum limit of Rs. 30 lakhs for all accounts. The SCSS account was created specifically for seniors to gain long-term savings in their later years. It is a reliable and secure account.
Rate of interest
Deposits made by account holders are eligible to receive interest at a rate of 8.2% for quarter April 1, 2023, until June 30, 2023. The rates are revised every quarter by the government. The interest is payable on a quarterly basis and is fully taxable.
Note that contributions made into the account but not extended or closed on maturity or extended maturity will earn interest at the rate applicable to the Post Office Savings Account.
Can SCSS account be closed anytime?
It has a five-year tenure, but it can be further extended by three years on maturity. The account holder has the option to extend the account for another three years from the date of maturity by submitting the appropriate paperwork along with the passbook to the relevant post office.
The account holder may withdraw the deposit and close the account at any time after submitting an application Form-2. The amount will depend on the following conditions, according to the SCSS notification-
(i) In the event that the account is closed before the first year of the account opening, interest accrued on the deposit will be deducted from the deposit and the remaining balance will be paid to the account holder.
(ii) If the account is closed after one year but before two years have passed since the day it was opened, an amount equivalent to 1.5 percent of the deposit must be withheld, and the remaining balance must be paid to the account holder.
(iii) If the account is closed on or after the two-year mark from the day it was opened, 1% of the deposit will be taken out and the remaining balance will be paid to the account holder.
In the event of premature closure, interest on the deposit is payable up to the date preceding the date of premature closure, less the penalty.
Deposit
The minimum deposit is set at Rs. 1000 and in multiples of Rs. 1000, with a maximum deposit amount set at Rs. 30 lakh. Investments made under this plan are eligible for the tax breaks provided by section 80C of the 1961 Income Tax Act.
Closure of account
The deposit made at account opening will be repaid on or before the expiration of five years from the date of opening the account, or after the expiration of eight years in the case of an account extension. The account holder must apply for closure by submitting a Form-3 application.
Source By: economictimes
