Savings scheme

Seniors Savings Plan I The Seniors Savings Plan can be opened before the age of 60; here’s how

The Seniors Savings Plan can be opened before the age of 60; here is how | Photo credit: PTI

Senior Citizen Savings Scheme (SCSS) is a government-backed savings scheme designed to provide a stable, low-risk income stream for seniors along with tax benefits. Retirees can invest up to Rs 15 lakh as a lump sum individually or jointly. It is available at all banks and post offices in India. An interest rate of 7.4% is payable for the April-June quarter in the plan.

Anyone over the age of 60 can invest in the plan. Anyone over 55 and up to 60 years old, retired under the Voluntary Retirement System (VRS) or the retirement pension, can invest, but within one month before retirement. These people can only open a SCSS account when the source of investment is pension benefits within one month of receiving the pension benefits. However, the Ministry of Finance, in a circular dated May 26, 2020, removed the one-month clause for those who retired during the lockdown period in 2020. The circular said the decision had been made to protect small investors from the effect of the national foreclosure. due to the Covid-19 pandemic.

Retirement benefits include contributions to the provident fund (PF), retirement or retirement bonuses, commuted pension, receipt of leave, the savings element of the insurance scheme linked to the group savings payable by the employer upon retirement, retirement and withdrawal benefits under the employee family pension scheme and ex gratia payments under a voluntary pension scheme or pension scheme special volunteer.

SCSS is better in terms of liquidity due to a shorter maturity of five years. In addition, the money can be withdrawn prematurely from the SCSS account by paying a penalty. SCSS investments are eligible for deduction under article 80C. Interest income received from SCSS is eligible for tax deduction under section 80TTB. A deduction of up to Rs 50,000 on interest income can be used.

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