Name of the Product
Senior Citizen Saving Scheme (SCSS)
Nature of the product
Fixed deposit
Asset Class
Risk on Capital
No risk on Capital, since sponsored by the government under the small savings schemes.
Objective of the Product and Key Features
1. A small savings schemes launched by the government with the main aim of providing senior citizens a regular income with tax benefits. 3. This is a long term scheme with a scheme period of 5 years. It could be extended upto 8 years.
Key Risk Factors
1. Liquidity Risk.
Liquidity and Tradability
The deposit is non-transferable and non-tradable. The investment is Illiquid in nature.
Estimated Long Term Return % and periodicity of Return
Interest Rate : 8.2% (October-December 2023) The interest amount is paid to the account holders on the first day of every quarter.
Residential Tax Status of Investor who can invest
• Only Indian Resident Individuals can invest in this instrument • NRI cannot invest in this instrument. • Non – individuals cannot invest in this instrument
Whether US Citizen in India / US Tax resident investor can invest
US Citizens residing in India cannot invest in this scheme. Senior Citizens Savings Scheme (SCSS) can be continued by an NRI provided the account has been opened before he acquired the status of NRI. It can be continued for a maximum period of five years. No further extensions are allowed in such cases.
Eligibility Criteria to Invest
• Indian citizens above the age of 60 years • Retirees between the age of 55-60 years who have opted for Voluntary Retirement Scheme (VRS) or Superannuation • Retired defence personnel above 50 years and below 60 years of age • The account can be opened in Individual capacity (or) jointly (only with the spouse). There is no age restriction for the spouse as a second joint holder.
Investment Limits (if any)
• Min investment is Rs 1000. • Max investment is Rs.15 Lakh or the amount received on retirement, whichever is lower. • One can make only one deposit in an account. • An investor can have more than one SCSS account, however the sum of investment across all the SCSS accounts cannot exceed Rs 15 lakhs. Other notes: 1. Incase of retirees who have opted for VRS and retired defence personnel (and opening SCSS account prior to 60 years of age) the maximum limit shall be restricted to the retirement benefits received by them or fifteen lakh rupees, whichever is lower. 2. An individual can have the account in Single or Joint name. A person can be first holder held jointly with his spouse. Similarly the spouse can be a first holder in another account jointly held with the individual, provided the spouse’s age > 60 Years.
Lock In Period (if any)
There is no lock in period for this instrument.
Maturity Period (if any)
Maturity period is 5 years with an option to extend further for 3 more years. This extension option is currently available only once and the extension request has to be made within 1 year after maturity of the SCSS account. The Subscriber can open another SCSS account after its maturity at the prevailing terms and conditions and interest rate. The subscriber can have any number of SCSS accounts , provided the total investment amount does not exceed Rs 15 Lakhs.
Nature of Income
Interest Income. Some details about how the interest income is computed: 1. Interest is credited on the first day of every quarter. Interest rate is fixed for the 5 year term at the time of opening or extension of account. 2. The interest amount is credited to the savings account linked to the SCSS account of the subscriber. 3. In case no savings account is available , then the interest is accumulated in the SCSS account, but does not compound. 4. Interest rate gets reset when the account gets extended for another 3 years, on the date of completion of 5 years.
Taxability of the Income in India & any Tax Benefits
Interest on SCSS is taxable as per the tax slab applicable to the person. In case the interest amount earned is more than Rs. 50,000 for a fiscal year, Tax Deducted at Source (TDS) is applicable to the interest earned. The inventor can claim a maximum of up to Rs 1.50 lakhs as income deduction under Section 80C of the Income Tax Act. Form 15H should be submitted by senior citizens if they do not want TDS to be deducted. The form 15H can be given only where the Senior Citizen’s taxable income does not exceed Rs 3.00 lakhs in the financial year.
Taxability of Income in U.S (if investable)
Not applicable.
Withdrawal Limits (if any)
The entire amount can be withdrawn prior to maturity subject to payment of penalty / subject to following conditions: Premature closure is allowed subject to the following conditions. • Withdrawal within 1 year of opening, there will be no interest credit for the period of investment • After expiry of 1 year but before 2 years , 1.5 % of the deposit amount is deducted and balance paid. • After expiry of 2 years , 1 % of the deposit amount is deducted and balance paid. • However, if the depositor is availing the facility of extension of account then he/she can withdraw the deposit and close the account at any time after the expiry of one year from the date of extension of the account without any penalty. • No penalty is applied in case of closure of account due to the death of the account holder. • If both the spouses have opened separate SCSS accounts under the scheme and either of the spouses dies, then the account(s) standing in the name of the deceased depositor shall be closed • If the spouse does not have another SCSS account and is a joint holder in the account where the first holder dies, then the spouse may continue the SCSS account in their own name, if he/she meets other eligibility conditions including age. • Multiple withdrawals from the accounts are not permitted.
Any other specific Uniqueness about the product
No loan facility is available on the instrument.
Any Links to read about the product / Regulations applicable
How can clients invest in it?
One can open an SCSS account in any post office and at select Public/ Private sector banks.
What is the process of investing?
Documents required for account opening • Form A • Identity proof • Address proof • A document confirming the individual’s age must be submitted
Document created by and date
Varun Shenoy on 15 February 2022.
Reviewed date
25 October 2023

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