SCSS Rules

There are several options in India for investing funds. One such option is the Senior Citizen Savings Scheme (SCSS). It allows individuals to secure a stream of income after their retirement. Like any investment option, individuals who avail themselves of this scheme have to comply with the SCSS rules to be eligible candidates.

What is Senior Citizen’s Savings Scheme?

The Senior Citizens' Savings Scheme (SCSS) is a government-backed retirement program for senior citizens in India, allowing them to invest a lump sum either individually or jointly.

Through this scheme, seniors can receive a steady income along with tax benefits. The investment is made via a one-time deposit into the account.

An account holder may open multiple accounts under SCSS, provided the total deposits across all accounts do not exceed Rs. 30 lakh. However, opening more than one account in the same branch within a calendar month is prohibited.

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Features & benefits of the Senior Citizen Savings Scheme (SCSS)

Senior Citizens Savings Scheme (SCSS) Rules

To be eligible for SCSS, an individual must meet one of the following criteria:

• Age: Be 60 years or older.
• Early Retirement: Be between 55 and 60 years old and have retired under superannuation or voluntary retirement scheme (VRS).

Key highlights of the senior citizen savings scheme (SCSS)

1. Government-backed: SCSS is a safe and secure investment option for senior citizens, supported by the Government of India.
2. Guaranteed returns: Offers a fixed interest rate of 8.2% per annum, providing steady returns unaffected by market fluctuations.
3. Flexible deposit options: Allows a one-time lump sum deposit, with a minimum amount of Rs. 1,000 and a maximum of Rs. 30 lakh across all SCSS accounts.
4. Tax benefits: Investments in SCSS qualify for deductions under Section 80C of the Income Tax Act, up to Rs. 1.5 lakh.
5. Premature closure option: Account holders can withdraw their funds before maturity, subject to certain penalties.
6. Option for extension: After the 5-year tenure, the SCSS account can be extended by another three years if desired.
7. Joint account facility: SCSS accounts can be opened individually or jointly with a spouse, though the primary holder must meet eligibility requirements.

Documents required for SCSS

Eligible individuals who are within 55–60 years of age will require the following documents to open an SCSS account:

• 2 passport-size photos
• Identity proof, such as an Aadhaar card, PAN card, Voter ID, or passport
  
• Address proof, such as an Aadhaar card or telephone bills
• Age proof, such as a PAN card, birth certificate, voter ID, or senior citizen card
• Documents showing the date on which the eligible individual received the retirement benefits
• Employer certificate conveying the details of retirement under superannuation

All the documents must be self-attested. Alongside the ones mentioned above, individuals may also need to submit other documents. Hence, it would be convenient to keep all retirement-related papers handy.

Also Read: SCSS vs FD

Eligibility criteria

According to SCSS rules, the following individuals can open an SCSS account with a bank or post office:

• Individuals over the age of 60 years
• Retired civilian employees over 55 years and below 60 years of age, provided the investment is made within one (1) month from when the retirement benefits are received
• Retired defence employees above 50 years and below 60 years of age, provided the investment is made within one (1) month from when the retirement benefits are received
• Non-resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible to open an SCSS account

Also read: Tax Saving Schemes for Senior Citizen

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Tax benefits under SCSS

Under Section 80C of the Income Tax Act, 1961, individuals can claim tax deductions on SCSS investments up to Rs. 1.5 lakh per year. If the total interest earned from SCSS accounts exceeds Rs. 50,000 annually, TDS will be applicable on the interest amount.

In summary, SCSS is an excellent option for senior citizens seeking stable, risk-free returns on their investment corpus. At an interest rate of 8.2% p.a., an investment of Rs. 30 lakh can yield a monthly income of approximately Rs. 20,500 for each investor.

Conclusion

The senior citizens’ savings scheme is meant for senior citizens in India. The scheme offers a regular income stream with tax-saving benefits while being completely safe. It is an apt investment choice for those over 60 and provides guaranteed returns, thus helping you financially during your golden years.