After retirement, even though income decreases, expenses continue. In such a situation, proper financial planning is very important. That’s why senior citizens should invest their money in a safe option that offers good interest and is risk-free. The Senior Citizen Savings Scheme (SCSS) is a secure and beneficial choice for retired individuals, providing financial stability along with a regular income. By making a lump sum investment in this scheme, one can enjoy the benefits of guaranteed income and tax exemption.
The Senior Citizen Savings Scheme (SCSS) is government-backed, so there is no risk of losing your money. What makes this scheme special is the interest it offers. The SCSS provides an annual interest rate of 8.2%, which is higher than other traditional investment options like Fixed Deposits (FDs). Additionally, investments in this scheme are eligible for tax exemption under Section 80C of the Income Tax Act.
Guaranteed Income of Rs 2 Lakh on Rs 5 Lakh Investment
According to the SCSS calculator, if you invest Rs 5,00,000 in a lump sum, the total amount will grow to Rs 7,05,000 in 5 years. You will earn Rs 2,05,000 as interest, and every quarter, Rs 10,250 will be credited to your account.
Minimum Investment Requirement
You can start investing in the SCSS with just Rs 1,000. The maximum investment limit is Rs 30 lakh. The scheme has a maturity period of 5 years, after which the invested amount is returned along with the earned interest.
Eligibility for Investment
Senior citizens aged 60 years or above.
Retired government employees aged 55-60 years, if the investment is made within one month of retirement.
Retired defense personnel aged 50-60 years.
Tax Rules on Interest
If the total annual interest from all SCSS accounts exceeds Rs 50,000, TDS (Tax Deducted at Source) will be deducted. However, you can avoid this by submitting Form 15G/15H.
Key Features of the SCSS Account
- Joint Account: A husband and wife can open a joint account, with a combined investment limit of Rs 30 lakh.
- Interest Payment: The interest is paid quarterly. It can be withdrawn via auto credit into a savings account or through ECS.
