Who is eligible for investment in SCSS 2004 scheme
Resident of India who is at least 60 years old.
who can open
The SCSS opening criteria as per the India Post website are given below:
i) A person above 60 years of age.
(ii) Retired civilian employees above 55 years and below 60 years of age, subject to the condition that the investment is to be made within 1 month of receipt of retirement benefits.
(iii) Retired Defense personnel above 50 years and below 60 years of age, subject to the condition that the investment is to be made within 1 month of receipt of retirement benefits.
(iv) The account can be opened in individual capacity or only jointly with the spouse.
(v) The entire amount deposited in the joint account shall be attributable to the first account holder only.
Who cannot invest in SCSS
Hindu Undivided Families (HUFs) and Non-Resident Indians (NRIs) are not allowed to invest in SCSS.
The account may be allowed to continue till maturity on a non-repatriation basis, and the account will be recognized as a non-resident account if the depositor becomes a non-resident Indian after opening the account and during the life of the account. SCSS Rules.
interest payment
If an account holder does not claim the interest payable every quarter, he will not get any further interest. Interest can be charged from a savings account opened in the same post office or ECS using car credit. In case of SCSS account, monthly interest can be credited to the savings account maintained with any CBS post office.
According to National Savings Institute, “Interest shall be payable on the first working day of 31st March/30th June/30th September/31st December, 1st April/July/October/January, as the case may be, from the date of deposit. Illustration and Afterwards, interest will be payable on the first working day of April/July/October/January”
For the quarter ended September 31, 2022, Rate of interest For SCSS is set at 7.4%. The Finance Ministry takes quarterly decisions regarding the interest rate of such small savings schemes.
tax on interest
If the total interest earned in all the SCSS accounts is Rs. 50,000 in a financial year, interest is taxable, and TDS at the prevailing rate will be deducted from the total interest earned.
If Form 15G/15H is submitted and the interest earned does not exceed the permissible maximum, no TDS will be charged.
SCSS Premature Closure Rules
According to the India Post website, the points allowing premature withdrawal are given below:
(i) The account may be closed prematurely at any time after the date of opening.
(ii) If the account is closed before 1 year, no interest will be payable and if any interest paid in the account will be recovered from the principal.
(iii) If the account is closed after 1 year but before 2 years from the date of opening, an amount equal to 1.5% of the principal amount will be deducted.
(iv) If the account is closed after 2 years but before 5 years from the date of opening, an amount equal to 1% will be deducted from the principal amount.
(v) The extended account can be closed without any deduction after the expiry of one year from the date of extension of the account.
Here are the important FAQs on SCSS:
Website:
1.
Can both the spouses open separate accounts in their individual capacity, with a separate limit of Rs 15 lakh for each of them?
Both the spouses can open individual and/or joint accounts with each other up to a maximum of Rs 15 lakh, provided both are individually eligible to invest under the relevant provisions of the rules governing the scheme .
2.
Whether nomination can be done after the account is opened
Yes, the depositor can make nomination at any time after opening the account but before its closure by applying in Form-I along with the pass book at the deposit office.
3.
Can the nomination be canceled or changed?
Yes, the nomination made by the depositor can be canceled or changed by submitting a fresh nomination in Form 1, where the account is being maintained at the deposit office.
4.
Can nomination be made in joint account also
Nomination can be done in joint account also. In such a case, the joint holder will be the first to receive the amount payable in the event of the death of the depositor. Nominee’s claim will arise only after the death of both the joint holders.
5.
Whether deposits can be made only out of the amount received as retirement benefit under SCSS scheme
If an investor has attained the age of 60 years and above, the source of the amount to be invested is unimportant [Rule 2 (d)(i)], However, if the investor is 55 years or more but less than 60 years and has retired on retirement or under voluntary scheme or special voluntary scheme or retired from defense services, then only retirement benefits can be invested in SCSS. could.
6.
What is meant by ‘Retirement Benefit’ for the purpose of SCSS, 2004?
“Retirement Benefit for the purpose of SCSS Rules” has been defined as any payment payable to a depositor on account of retirement, whether on retirement or otherwise and includes Provident Fund Dues, Retirement/Retirement Gratuity, commuted value of pension , cash equivalent of leave, savings element of Group Savings Linked Insurance Scheme payable by the employer to the employee on retirement, retirement-cum-withdrawal benefit under Employees’ Family Pension Scheme and ex-gratia payment under Voluntary Retirement Scheme’ (of Rule 2(a) The Senior Citizens Savings Scheme (Amendment) Rules, 2004 notified on 27 October 2004).
7.
Is premature withdrawal of deposits allowed from accounts under SCSS, 2004?
The account holder can withdraw the deposit and close the account at any time subject to the following conditions:-
- If the account is closed before one year from the date of opening of the account, the interest paid on the amount deposited in the account will be recovered from the deposit amount and the balance amount will be paid to the account holder.
- If the account is closed after one year but before the expiry of two years from the date of opening of the account, an amount equal to one and a half percent of the deposit amount will be deducted.
- If the account is closed on or after the expiry of two years from the date of opening of the account, an amount equal to one percent of the deposit amount will be deducted.
- However, if the depositor is availing the facility of extension of account under Rule 4(3), he can withdraw the deposit at any time after the expiry of one year from the date of extension of the account and close the account. could. no deduction.