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Updated on July 03, 2024The Senior Citizens Saving Scheme (SCSS) is a specific savings scheme offered by the Indian government to encourage senior citizens to save money and accumulate wealth. Launched in 2004, it has been a successful scheme in attracting senior citizens to save and grow their savings.
Overall, the SCSS is a valuable savings scheme designed specifically for senior citizens in India. It offers a safe and convenient way to save money, earn interest, and access various benefits.
Is the SCSS interest rate fixed for 5 years?
No, the interest rate for the Senior Citizen Savings Scheme (SCSS) is not fixed for 5 years. It is reviewed and subject to change every quarter by the Government of India. Once invested, the prevailing interest rate at the time of account opening remains applicable for the entire 5-year tenure of that particular deposit.
What happens to SCSS after 5 years?
fter the initial 5-year term of the SCSS account, it can be extended for an additional 3 years. The extension must be requested within one year of maturity. During the extended period, the interest rate applicable at the time of extension will continue to apply. Upon maturity after the extended period, the account can be closed or extended again, subject to prevailing rules.
Can I invest 30 lakhs in SCSS?
No, you cannot invest 30 lakhs in a single SCSS account. The maximum amount that can be invested in SCSS is ₹15 lakhs per individual. However, a joint account can also be opened, but the total combined investment across all accounts should not exceed ₹15 lakhs.
Is SCSS tax-free?
No, SCSS is not entirely tax-free. While the principal amount invested qualifies for a deduction under Section 80C of the Income Tax Act up to ₹1.5 lakhs, the interest earned is fully taxable as per the investor’s applicable income tax slab rate.
How to avoid tax on SCSS interest?
While the interest earned on SCSS is taxable, senior citizens can claim a deduction under Section 80TTB of the Income Tax Act, which allows for a deduction of up to ₹50,000 on interest income from savings accounts, fixed deposits, and SCSS. Additionally, submission of Form 15H can prevent TDS if the total income is below the taxable limit.
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