Retirement Scheme: After retirement, most people worry about how they’ll meet their monthly expenses without a regular income. Medical and daily expenses also increase with age. At such times, a plan is needed that is secure, risk-free, and provides a fixed monthly amount. The Post Office Senior Citizen Savings Scheme was created for this purpose and is fully protected by the government. Therefore, it is becoming a preferred choice for older investors.

What is the Senior Citizen Savings Scheme?

This scheme is specifically for people aged 60 and above. However, individuals retiring between 55 and 60 years of age can also invest within one month of retirement. Furthermore, employees over 50 years of age who have retired under voluntary retirement can also benefit from this scheme. Accounts can be opened both individually and jointly. The maximum investment limit for a single account is ₹30 lakh, and for a joint account, this limit increases to ₹60 lakh.

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What is the investment limit?

Investment in SCSS can be started with a minimum of ₹1,000. The maximum investment limit applies as per age-specific rules. This scheme runs for 5 years and can be extended for an additional 3 years upon maturity. This option is considered much better than other schemes for those looking for a stable income over a long period of time.

Understand the monthly income calculation here

Currently, this scheme offers an interest rate of 8.2 percent per annum. Interest is credited to the account every three months, assuring the investor of regular income. If an individual invests ₹15 lakh, then at an interest rate of 8.2 percent, the interest earned per annum would be approximately ₹1,23,000. This amount, spread over 12 months, amounts to approximately ₹11,750 per month, which serves as a stable monthly income. This is a significant relief for senior citizens who require fixed monthly financial support.

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Tax Benefits

Investing in SCSS provides a tax deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. However, interest income is fully taxable. If an investor’s total interest income exceeds ₹50,000, TDS is deducted. TDS relief can also be availed by submitting Form 15H or 15G in time, provided the income criteria are met.