The Post Office's Senior Citizen Savings Scheme (SCSS) is a popular savings program. This program has been specifically created to meet the needs of senior citizens after retirement. The main feature of this plan is that it must be invested in one lump sum and that once it matures, you start making set interest payments every three months. Money is completely safe with this scheme. Your money is unaffected by market fluctuations of any magnitude.
Deposit on 5 lakh more than 7.2 lakh
The government increased the interest rate on the Post Office Senior Citizens Scheme to 7.6 percent per year (compounding) beginning on October 1, 2022. This plan matures in five years. If you make a lump-sum investment of Rs. 5 lakh, your total corpus at maturity will be around Rs. 7.21 lakh, according to the compounding calculator. Here, the interest amount is Rs. 2.21 lakh. This will result in interest payments of Rs 11,058 per quarter.
SCSS: Who can open an account
The post office's website has information that indicates the annual interest rate for this program will be 7.6%. Deposits in this can be made in increments of 1000 rupees. Additionally, the maximum investment allowed is Rs 15 lakh. This requires a one-time investment of large cash.
Under SCSS, the depositor can maintain numerous accounts alone or jointly with their spouse. When all things are considered, the maximum investment is 15 lakhs. Up to Rs. 1 lakh in cash can be used to start the account, but checks are required for sums more than that.
Husband/wife can also open an account together.
The depositor can keep multiple accounts under SCSS, either on their own or jointly with their spouse. However, the maximum investment amount is 15 lakhs when all factors are considered. Cash can be used to open the account for Rs. 1 lakh amounts, but checks must be used for amounts above that.
Nomination options are available when opening and canceling an account in a senior citizen savings plan. Transferring this account from one post office to another is possible. Owners of this account may prematurely close it. However, the post office will only remove 1.5% of the deposit when closing the account after the first year and 1% when closing the account after the second.
Tax Exemption and Tax Liability
Tax deductions on deposits to the SCSS account are another perk. Under Income Tax Act Section 80C, one can deduct up to Rs 1.5 lakh on your investment in this plan. However, SCSS interest income is taxed. When the combined interest income from all of your SCSS hits Rs 50,000 annually, TDS deductions begin. The tax amount reduces your interest. By submitting Form 15G/15H, you can obtain relief from TDS if the interest income does not exceed the specified limit.