NEW DELHI: A Savings Plan for Seniors (SCSS) is a government-supported retirement scheme. A senior can invest in the scheme on a lump sum basis, individually or jointly, and access regular income as well as tax benefits.
Here are the following three criteria that can help an Indian resident to invest in the program.
1. An Indian senior, 60 years of age or older.
2. Upon reaching the age of 55-60, if you have opted for the Voluntary Retirement System (VRS), you can invest in the SCSS.
3. Any retired military personnel who have reached the age of 50 and are under the age of 60 may also invest in the plan.
HUFs and NRIs are not permitted to invest in the SCS Scheme.
You can open a SCSS account at any authorized bank or at any post office in India. When opening an account, you can make a minimum deposit of Rs1,000 up to ??15 lakh in one payment. The SCSS account is transferable nationwide. The account is initially opened for a period of five years which can be extended by three years.
It is one of the safest investment options for seniors.
While investing, a senior can benefit from an income tax deduction of up to ??1.5 lakh under section 80C of the Income Tax Act. Currently, the applicable interest rate on SCSS is 7.4% per year.
Under this program, interest payments are quarterly and are credited on the first day of April, July, October and January of each fiscal year.
Premature withdrawal from the account results in a penalty. Withdrawals are allowed after one year, the penalty varying between 1% and 1.5% of the amount deposited.
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