Income Tax Tips: Senior citizens will get tax exemption worth lakhs of rupees, know how to claim it..


Government Scheme Senior Citizen Savings Scheme (SCSS) is a better scheme for tax savings for senior citizens. This scheme is for Indian citizens above 60 years of age. The objective of SCSS is to provide a regular income to senior citizens after retirement. Under the scheme, taxpayers can claim tax deductions by depositing up to Rs 1.5 lakh every year under Section 80C. Let us tell you, currently there are two types of tax regimes in the country. New tax regime and old tax regime. Tax deduction of section 80C can be claimed only in the old tax regime.


SCSS is available in government/private sector banks and post offices. Being a government scheme, the returns on it are guaranteed. The deposit amount matures after 5 years from the date of opening of the SCSS account, but this tenure can be extended only once for 3 more years. From January 1, 2024, this scheme is offering 8.2 percent interest annually.

Under SCSS, interest is paid every three months, ensuring the maturity of your investment. Interest will be credited on the first day of every April, July, October, and January.

SCSS: How much tax will be saved?

SCSS has a better tax exemption scheme. Tax exemption can be claimed under Section 80C of the Income Tax Act, 1961 on annual deposits up to Rs 1.5 lakh in SCSS. Tax liability on interest received on SCSS will be as per the tax slab applicable to individuals. If the interest income in a financial year is more than Rs 50,000, then Tax Deducted at Source (TDS) will be deducted. Investment in SCSS is applicable from 2020-21 onwards till the TDS deduction. If the interest income does not exceed the prescribed limit, then you can get relief from TDS by submitting Form 15G/15H.

Where will the account be opened, what is the maximum deposit?

The minimum deposit in SCSS is Rs 1,000. Whereas a maximum of Rs 30 lakh can be deposited. Senior Citizen Savings Scheme account can be opened in any authorized bank of the country or all Indian post offices. For this, the account opening form will have to be filled and submitted along with a copy of the KYC document, which includes a passport-size photograph along with an identity card, address proof, and age proof.

Under SCSS, a person aged 60 years or more can open an account. If someone is 55 years or older but less than 60 years and has taken VRS, then he can also open an account in SCSS. But the condition is that he will have to open this account within one month of receiving the retirement benefits and the amount deposited in it should not be more than the amount of retirement benefits.


Know mature and pre-mature rules

Please note that the SCSS account will be closed in case of the death of the account holder before maturity and all the matured income will be transferred to the legal heir/nominee. For a death claim, the nominee or legal heir will have to submit a written application in the prescribed format along with the death certificate to facilitate account closure.

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