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Income Tax Planning: Senior Citizen’s Saving Scheme – SCSS

• Senior Citizen's Saving Scheme (SCSS) product was introduced for senior citizens in the annual budget by the then Finance Minister in the year 2004. It is a part of Section 80C of the Income Tax Act.


• All senior citizens can invest in this scheme.


• Investments of upto INR 1,00,000 made in this scheme are eligible for deductions from taxable income.


• Maximum investment permissible in the scheme for an individual is INR 15,00,000.


• Interest payable on deposits under the scheme is 9% per annum. The interest is payable quarterly. The interest is paid on 31st March, 30th June, 30th September, 31st December. The interest can be credited directly to the savings account of the investor. The interest earned on this deposit is fully taxable.


• Under this a joint account can be opened only with spouse. In case of a joint account age of the 1st holder is considered as the age eligibility factor for opening the account. The age of the 2nd holder (spouse) doesn't matter.


• The tenure of the scheme is 5 years which can be extended for another 3 years on maturity.


• If on maturity the proceeds are not withdrawn and also the account is not renewed within one year of maturity, then post maturity the interest at the rate applicable to the deposits under post office savings account will be paid.


• Nomination facility is available.


• Since the product is offered by the government of India, it is one of the safest investment instruments.

 

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