a retirement savings plan There is a Senior Citizen Savings Scheme (SCSS) specially designed for senior citizens, or those above 60 years of age. Government policy determines the interest rate of SCSS, and it gives account holders a steady income during their retirement. SCSS account can be opened by filling the form and depositing a minimum of Rs 1,000 or any amount in multiples of Rs 1,000.
According to a PIB release, attention is invited to Rule 7(2) of SCSS, and the following is clarified:
- In cases where the SCSS account holder dies and the account is being closed at the request of the account nominee/legal heir, the rate of interest applicable to the SCSS scheme will be paid till the date of death of the account holder. Thereafter, the interest rate applicable on the Post Office Savings Account will be paid from the date of death of the account holder till the date of last closure of the account.
- The premature closure clause is not triggered due to the death of the SCSS account holder. Premature closure of the account is applicable only if the SCSS account holder requests for closure of his/her SCSS account before the maturity period. In such cases of premature closure of the account, penalty will be levied as per Rule 6 of SCSS.
Who is eligible for investment in SCSS 2004 Plan
Citizens of the age of 60 years or above can open the account. Between the ages of 55 and 60, who have chosen voluntary retirement Scheme (VRS) or retirement can do so, while retired members of the armed forces between the ages of 50 and 60 can do so. After receiving the retirement income, the investment should be made in the SCSS account within one month.
interest rate on scss
According to the website of India Post, the important points on the interest payment of the scheme are given below.
(i) Interest shall be payable on quarterly basis and shall be applicable from the date of deposit till 31st March/30th June/30th September/31st December.
(ii) In case the interest payable every quarter is not claimed by the account holder, no additional interest will accrue on such interest.
(iii) Interest can be withdrawn through auto credit in the savings account located in the same post office or ECS. In case of SCSS account in CBS Post Offices, monthly interest can be credited to Savings Account at any CBS Post Office.
(iv) Interest is taxable if the aggregate interest in all SCSS accounts in a financial year exceeds Rs. 50,000/- and TDS at the prescribed rate will be deducted from the total interest paid. No TDS will be deducted if Form 15G/15H is submitted and the interest earned does not exceed the prescribed limit.