October 1 is celebrated as the International Day of Older Persons around the world. The day is celebrated to raise awareness of issues affecting the elderly. On this international day of the elderly, here is how an elderly person can secure their finances by investing in the Savings Plan for Seniors (SCSS).
India Post used their official Twitter account and tweeted: “October 1 is celebrated around the world as the International Day of Older Persons to raise awareness of issues affecting the elderly. Seniors can take care of their financial security by investing in the Savings Program for the Elderly (SCSS). “
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1. Who can open an account under the Senior Savings Plan (SCSS): –
A person over the age of 60; retired civilian employees over the age of 55 and under the age of 60, provided that the investment is made within one month of receipt of pension benefits; retired defense employees over the age of 50 and under the age of 60, provided the investment is made within one month of receipt of pension benefits.
Note that the account can be opened individually or jointly with the spouse only. The entire deposit in a joint account is attributable to the sole holder of the first account.
October 1 is celebrated around the world as the International Day of Older Persons to raise awareness of issues affecting older people. Seniors can take care of their financial security by investing in the Seniors Savings Plan (SCSS). #InternationalOlder’s Day
– India Post (@IndiaPostOffice) October 1, 2021
2. Deposit: –
The minimum deposit must be Rs 1000 and in multiple of 1000, subject to a maximum limit of Rs 15 lakh in all SCSS accounts opened by an individual.
In the event of an excess deposit made to the SCSS account, the excess amount will be refunded immediately to the depositor and only the interest rate of the PO savings account will be applicable from the date of the excess deposit until the date of repayment.
In addition, investments under this scheme are eligible for the benefit of section 80C of the Income Tax Act 1961.
3. Interest: –
7.4% per annum is payable on a quarterly basis and applicable from the date of deposit until March 31 / June 30 / September 30 / December 31. If interest payable quarterly is not claimed by an account holder, such interest will not earn additional interest.
Interest can be drawn by automatic credit to a savings account at the same post office, or ECS. In the case of a SCSS account at CBS Post Offices, monthly interest can be credited to a savings account opened at any CBS Post Office.
Interest is taxable if the total interest on all SCSS accounts exceeds Rs 50,000 in a fiscal year and the TDS at the prescribed rate is to be deducted from the total interest paid. No TDS will be deducted if the 15 G / 15H form is submitted and the accrued interest does not exceed the prescribed limit.
4. Premature closure: –
The account can be closed prematurely at any time after the opening date. If the account is closed before 1 year, no interest will be due and if the interest paid on the account will be recovered in principle.
If the account is closed after 1 year, but before 2 years, from the date of opening, an amount equal to 1.5% will be deducted from the principal amount. Whereas, if the account is closed after 2 years but before 5 years from the date of opening, an amount equal to 1 percent will be deducted from the principal amount.
The extended account can be closed after the expiration of one year from the date of expansion of the account without any deduction.
5. Closing of the account at maturity: –
The account can be closed after 5 years from the date of opening by submitting the prescribed application form with passbook to the relevant post office. In the event of the death of the account holder, from the date of death, the account will bear interest at the rate of the PO savings account. In the event that the spouse is a joint owner or a sole representative, the account may be maintained until maturity if the spouse is eligible to open an SCSS account and does not have another SCSS account.
6. Account extension: –
The account holder can extend the account for an additional 3 years from the due date by submitting the prescribed form with passbook to the relevant post office. The account can be extended within one year of the expiration. The extended account bears interest at the rate applicable on the maturity date.