Concerns of senior citizens are where to invest and how they get regular income with safety. The answer to this is Post Office Senior Citizen Scheme or SCSS. Let us discuss about this scheme in detail.
Post Office Senior Citizen Scheme or SCSS is 5 years one-time deposit scheme.
Who can invest in Post Office Senior Citizen Scheme or SCSS?
# An individual who attained the age of 60 years of age or above on the date of account opening.
# An individual who attained the age of 55 years or more but less than 60 years of age and has retired on superannuation or under a voluntary or special voluntary scheme. But they can open this account only on a condition that the account is opened within one month of receipt retirement benefits and amount should not exceed the amount of retirement benefit.
# Retired personnel of Defence Services (excluding civilian Defence employees) without any age restrictions. But they have to fulfil other limits specified in the rules.
# NRIs and HUF are not eligible to open this account.
Where to open Senior Citizen Savings Scheme or SCSS?
You can open Senior Citizen Savings Scheme either in post office or with recognised 24 PSU banks and one private bank.
The list of 24 nationalised banks are State Bank of India, State Bank of Hyderabad, State Bank of Bikaner and Jaipur, State Bank of Patiala, State Bank of Mysore, State Bank of Travancore, Allahabad Bank, Andhra bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Punjab National Bank, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India, Vijaya Bank and IDBI Bank. One private bank allowed to open this scheme is ICICI Bank.
How to open Senior Citizen Savings Scheme or SCSS?
# Fill the Form A of account opening.
# Deposit Amount-If deposit amount is less than one lakh, then it is accepted in cash. If it is more than Rs.1 lakh then either in cheque or DD.
# Two passport size photographs.
# Age Proof like Passport, Senior Citizen Card, Birth certificate issued by MC/Gram Panchayat/District office of registrar of births and death, Voter ID card, PAN card, Ration card, Date of birth certificate from the school or Driving license.
# Address and Identity Proof like passport or PAN card.
# You must carry original documents for KYC verification purpose.
How much one can invest in Senior Citizen Saving Scheme 0r SCSS?
# Minimum of Rs.1,000 and in multiples of Rs.1,000.
# Maximum of Rs.15 lakh.
One can open multiple accounts either in an individual capacity or jointly with spouse. But the maximum limit including all his accounts must not cross the maximum limit of Rs.15 lakh.
What is the rate of interest of Post Office Senior Citizen Scheme or SCSS?
Earlier, the interest rate on SCSS used to be declared once in a year. But not it is declared on a quarterly basis like April-June, July-September, October-December, and January-March. Refer my earlier post for the recent changes done in interest rates at “Post Office Savings Schemes -Changes effective from 1st, April 2016“.
So as per this, the interest rate for April-June quarter of 2016 is 8.6%. But in many posts, articles or even RBI mentioned that SCSS compounding frequency is on quarterly. However, when the depositor getting the whole interest earned on quarterly base then where comes the quarterly compounding effect?
How they pay the interest for Post Office Senior Citizen Scheme or SCSS?
Interest will be payable on the quarterly basis on 1st working day of April, July, October and January. If you fail to claim such quarterly interest, then this interest amount will not earn any further interest. It will be kept idle. For the first time it is paid from the date of deposit to 31st March/30th June/30th September/31st December and then every quarter.
Interest is rounded off to a rupee. Like if the interest is less than 50 paisa is ignored and more than 50 paisa is rounded off to a rupee. There will not be any compounding. So for example, if you deposited Rs.1,00,000 and interest rate at 8.6%, then for a year it fetches Rs.8,600. This they divide into 4 (because they pay it in 4 quarters) and pay you Rs.2,150.
Duration or maturity of Post Office Senior Citizen Scheme or SCSS
It is 5 years fixed deposit kind of product. After the completion of 5 years, you have to submit the written application along with passbook and Form E.
In case you not close the account after maturity and also does not extend the account, the account will be treated as matured and you will be entitled to close the account at any time. However, post-maturity interest at the rate as applicable to the deposits under the Post-office Savings Accounts from time to time will be payable on such matured deposits up to the end of the month preceding the month of the closure of the account.
What happens in case of death of depositor?
In case of death of the depositor before maturity, the account will be closed and deposit refunded along with interest to nominees or legal heirs if the nomination was not made or in case of death of nominee.
If the total amount including interest payable is up to Rs.1 lakh, it may be paid to the legal heirs on production below documents.
- Letter of indemnity
- An affidavit
- A letter of disclaimer on an affidavit
- A certificate of death of the depositor on stamped paper in the form as in Annexure to Form F.
Whether Pre-mature withdrawal allowed?
Yes, but with certain conditions. You are not allowed to withdraw within one year of account opening. You have to fill the Form E for this early withdrawal.
# In case the account is closed after the expiry of 1 year but before the expiry of 2 years from the date of opening of the account, an amount 1.5% of the deposit shall be deducted and the balance paid to the depositor.
# In case the account is closed on or after the expiry of 2 years from the date of opening of the account, an amount equal to 1% of the deposit shall be deducted and balance paid to the depositor.
Whether one can extend the Senior Citizen Saving Scheme or SCSS?
# Account will not be extended automatically.
# You can extend for a period of 3 years after 5 years maturity period. However, you have to submit Form B within one year from the date of maturity.
# Also, such extended accounts can be closed after one year of extension without any penalty. Means after completion of 6th year, one can withdraw the amount without any penalty.
# Interest rate during such extension period will be as per prevailing rate of interest after 5 years maturity.
# Only one extension is allowed to the old account. Means after 5 years completion of SCSS, you can extend only for once. After that, the account will be matured.
# However, you are free to open one more account during the old account tenure or after maturity of old account subject to the maximum ceiling of Rs.15 lakh.
Whether one can nominate?
Yes, you can nominate one or more than one persons. Also you can nominate, change, or cancel before the maturity as and when you wish. You have to submit Form C and present the passbook for registering, changing or cancelling the nomination. This service is totally free and there is no fee to it.
In case of joint account deposit. The nominee will come into picture only after the death of both joint account holders.
Whether loan facility is available?
No, you are not allowed to avail the loan by pledging it. Because this scheme is meant for regular income from your investment.
Whether transfer facility is available?
Yes, one can transfer Post Office Senior Citizen Scheme deposit from one office to another office. You have to fill Form G and enclose the passbook. If the deposit amount is Rs.1 lakh or above, a transfer fee of Rs.5 per Rs.1 lakh of deposit for the first transfer and Rs.10 per Rs.1 lakh of deposit for the second and subsequent transfers will be payable.
However, SCSS deposit can’t be transferred to others or it can’t be traded.
What if you break the Senior Citizen Saving Scheme or SCSS rules and deposited the amount?
Many may break the rules in lure of higher interest rate. So if banks or post office found that there is any break of rules from depositor, then the account will be closed immediately. Amount will be refunded after deducting the entire interest paid to such deposit from starting to till date.
Joint Account Rules of Senior Citizen Savings Scheme or SCSS–
# You can open the Post Office Senior Citizen Scheme scheme jointly with spouse ONLY.
# The age of first account holder will be verified for eligibility. But not the spouse of a first account holder.
# In the event of a death of first account holder, then second account holder continue as primary account holder but with the condition that the maximum overall limit of the second holder must not cross Rs.15 lakh.
# Even though it is joint account first holder is attributed to the scheme. There is no sharing from a joint holder.
# Both individuals can open as many accounts as they can subject to the maximum ceiling of Rs.15 lakh based on their eligibility condition either individually or jointly.
# Incase the first holder dies and second holder continue the scheme but if his/her limit crossed the maximum ceiling of Rs.15 lakh from all accounts, then such over and above Rs.15 lakh will be refunded to him/her.
# If both spouses holding individual accounts and either of spouse dies means the survivor can’t continue the account. They have to close the deceased spouse account.
Tax Benefits of Senior Citizen Savings Scheme or SCSS-
# During Investment-One can avail up to Rs.1,50,000 as a maximum benefit under Sec.80C by investing in SCSS scheme.
# Interest Income-Interest income is treated as taxable income. Hence, there is no tax benefits. It will be taxed as per your tax slab. TDS can be deducted on interest earned if it exceeds the minimum limit prescribed by the Government which currently is Rs 10,000 and TDS is 10%.
# If your income falls before basic exemption limit (Currently, if your age is below 60 years then it is Rs.2.5 lakh and for above 60 years it is Rs.3 lakh), then you can submit Form 15G (if your age is less than 60 years) or Form 15H (if your age is 60 years or above) to avoid TDS. However, in case the tax is already deducted, then you can file IT return on your own and claim the refund.
Income Tax E-Filing Vault – How to secure tax e-filing account?
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Susmita
Respected Sir,
It is so kind of you that you provide valuable information in your blog.
I have asked you earlier whether my mother who is a senior citizen can open SCSS account or not, and you replied yes.
But later I have read elsewhere that “Only funds got on retirement can be invested in Senior Citizens Savings Scheme”.
My mother is housewife and has no income from retirement. In this case, will she be able to open SCSS in her single name?
Waiting for your reply.
Regards
Basavaraj Tonagatti
Dear Susmita,
There is no such restriction on this. However, the restrictions what you are sharing is to those who took VRS or retirement and then such rules apply. For others whose age is above 60 years can easily invest their own money.
Susmita
Hello Sir,
1) Can my mother who is a senior citizen can open SCSS in her individual name as single holder and make me (her only daughter) nomine?
2) Will she earn interest in the rate of the quarter when she opens the account for next 5 years? Or it will keep changing with new rate declarations in every quarter?
3) If she opens SCSS in bank, can she submit 15H for SCSS along with other FDs in bank if any?
Regards
Basavaraj Tonagatti
Dear Susmita,
1) Yes.
2) It will be fixed and it not change on a quarterly basis. The interest rate at the time of opening the account is the same as what you get throughout the period.
3) Yes.
Susmita
Hello Sir,
Kindly let me know:
1.My mother has FD in the bank where she has done SCSS. Does she need to submit two separate 15H form one for FD and another for SCSS?
2.Kindly guide about point no.19 in 15H for SCSS:
a) Identification number :
b) Nature of income
c) Section under which tax is deductible
Basavaraj Tonagatti
Dear Susmita,
Yes, you have to submit two Form 15H.
Vishakha
Hi Basu,
Thanks a lot for the article.It was clear and concise. I was researching about a safe investment option for my mother who will be retiring soon. One thing about SCSS is that it can be held for a maximum period of 8 years after which the account reaches maturity. What I would like to know is whether it is possible to open a new account for a period of 5/8 years after the first one closes?
thanks,
Vishakha
Basavaraj Tonagatti
Dear Vishakha,
Yes, she can open new account.
ragahav
HeLLO is it in Bank FD’s Senior savings scheme FD also Covers the 5 L Insurance as per 2020 budget announcement.
Basavaraj Tonagatti
Dear Raghav,
Yes.
Nandu
is Post office deposit safer than bank, I understand banks have only 1 lakh insurance cover; Moving to FD during this is better ?
Basavaraj Tonagatti
Dear Nandu,
It is now increased to Rs.5 lakh. Yes, Post Office FDs are safer than Bank FDs.
ashok kr pramanik
can a widow(below age of 50 ) of an exservieman,can open an scss?
Basavaraj Tonagatti
Dear Ashok,
No.
Ravi
Hello Basava
What is 80TTB? Can senior citizens avail tax benefit only upto 50k? What if annual income less than 3 Lakhs and where to submit 15 H for postal scss.
Basavaraj Tonagatti
Dear Ravi,
I have written a detailed post on this. Refer the same at “Section 80TTB – Rs.50,000 deduction for Senior Citizens“.
Gajendra
Can SCSS can be extended beyond 5 years in 55 years VR cases, where a person opened SCSS at 55 years but not completed 60 years at the time of extension beyond 5 years. No clarity from Postal Authorities due to new software system flaw.
Basavaraj Tonagatti
Dear Gahendra,
Extension in the sense re-investment I think. If my understanding is correct, then YES.
Vasavan
Sir,
My mother who is 78 years old is a house wife and living alone in native. She has already invested Rs.9.80 Lakh in Senior Citizen Savings Scheme (SCSS) in post office. Can I invest my money Rs.5.20 Lakh in her name in SCSS? i.e; I will be issuing the cheque. I intend to invest this in 5 instalments over a period of 5 months or so. It is okay? Or should I necessarily transfer this money in her name name and she then invests? What about the taxation? Will it be taxed on me? My mother gets a monthly income of Rs.17,500/- from her various fixed deposits including SCSS. Apart from this she does not have any other income. Please throw some light on this.
Basavaraj Tonagatti
Dear Vasavan,
Make sure that you have gift deed (in plain paper). In that case, the income will not be considered under your head.
Vasavan
Thank you Sir.
Krishna
Hi Basavaraj,
How many times can we extend or freshly re-invest again second and third time for the below post office schemes once they are matured, since PPF can be extended multiple times
Post office senior citizen scheme
Post Office time deposit saving scheme
Post office monthly income saving scheme
Basavaraj Tonagatti
Dear Krishna,
As long as you wish for.
sunil garhwals
please tell me the actual amount when i deposited the 15 lac after my maturity date .I deposited the amount in jun 2015 . please let me know.
Basavaraj Tonagatti
Dear Sunil,
It is hard for me to calculate. Contact the nearest Post Office for the same.
sunil garhwal
iam an ex service service man indian army retired on 31 amy 2015.athen i opened my scss in loharu (haryana)post office.Now i want to check my account and my RD account balance.
Basavaraj Tonagatti
Dear Sunil,
It is better first you transfer those to your nearest account.
Rajinder
Can we avoid tds on 60000 interest in SCSS by sub form 15h. If individual has no other income
Basavaraj Tonagatti
Dear Rajinder,
YES.
Mrs. Naina Nair Swamy
Sir I read your reply to liselle madams query. Would like to inform you that when my dad n I went to SBI branch at Bangalore they refused to open multiple scss accounts on the same day although it was well within the overall limit with reasons that one account one calendar month. Is there any rule under the scss which contradicts SBI claim. Please share letter no. Or circular no. Ad SBI did not hv any circular with them to show me.thank you.
Basavaraj Tonagatti
Dear Mrs.Naina,
It is their RULE which they set as per themselves. If there is any such rule, then let them show it to public. As per my knowledge, there is no such rule exist on this earth 🙂
Liselle
Sir I desire to open multiple scss of RS.3.00 lakhs each on same day with a nationalised bank. The idea is that if I hv need of the money I need to break only one thus reducing the loss for premature closure. Does the scss rule permit me to open multiple scss accounts on same day with same bank within the overall limit of RS. 15.00 lakhs. Would be highly obliged if you reply thanks sir
Basavaraj Tonagatti
Dear Liselle,
WHY NOT? You can open in that way.
Milind
” Interest rate during such extension period will be as per prevailing rate of interest after 5 years maturity” . Does it mean that at the time of opening the scss account if the rate of interest was say 8.7% it remains fixed for the 5 year tenure?
Basavaraj Tonagatti
Dear Milind,
YES.
SOM RAJAN
I think there is a difference of 0.01% between post office and sbi rates as per sbi portal. It is show as 8.6% p.a. pl comment.
Ray
Dear Sir,
Please suggest me if my mother would be eligible for SCSS scheme, she’s a senior citizen, widow pensioner, can I invest 15 lakhs on her behalf in SCSS scheme sir?
Thanks and regards
Basavaraj Tonagatti
Dear Ray,
YES, she is eligible.
Rabindra
Sir today i went to enquire abt scss account in canara bank branch for my mother. They told me that interest rate keeps changing quartery and u will not get fixed quarterly amount. Is the bank manager right.
Can you provide any circular where it is mentioned amount once invested will bear same interest rate for 5 year. I am not able to find it online.
Basavaraj Tonagatti
Dear Rabindra,
If you have doubt, then cross check with Post Office also. However, it is known fact that you will lock the interest rate for next 5 years in SCSS.
SOM RAJAN
The roi will not change. I think it will change in case of ppf. Pl comment.
NIRAV
My papa had joinly invested in scss with mummy 5L. Now I want to invest 2L in scss in mother’s name. Plz guide me. Max howmuch I can invest in my mom’s name?
Basavaraj Tonagatti
Dear Nirav,
Yes, you can invest in her name of Rs.2 lakh.
Ria
`Hello Team,
My father is a sr citizen and as per given criteria he is eligible for opening an account. For same, i have few queries..
Q1- Interest received on deposited amount is taxable? If yes what is the cap?
Q2- Can he open the SCSS account in ICICI bank? If yes, then Is there any difference in interest rate? Does same procedures and rules would also be same?
Q3- Can interest be allowed to transfer to other ICICI saving account on quartely basis?
Q4- in case of premature withdrawal, If deposited amount is 1 lac, after 1year assuming the amount is 108600 rs (principle+interest 8.6%). If user withdraw the complete amount then 1.5% is penalty. In this case what is penalty?
a) 1.5% of 108600rs
b) 1.5% of 100000rs
Basavaraj Tonagatti
Dear Rai,
1) YES. It is taxable as per his income tax slab rate.
2) Yes, he can open with ICICI Bank. There is no difference in that.
3) Check with the bank.
4) It is on the principal.
Ria
Q5- Since he is retired from private organisation and has no income then.. will still if he deposit less that 15 lacs, his interest is taxable?
Q6- Can he open more than one account? For example- He has 5 lacs to deposit. Can he open 5 accounts on his name carrying 1lac each?
Basavaraj Tonagatti
Dear Ria,
5) YES.
6) He can open multiple accounts but the combined limit should be Rs.15 lakh only.
7) Yes safe.
Ria
Q7- Even if this account is opened at ICICI, This product is backed by Government? Hence, even if the ICICI bank goes bankrupt, money is safe? .
M RAMANJI
My father is died at 17 -7-17(,one year) but not close the accounts . SCSS & sb account ..my doubt is any problems
Basavaraj Tonagatti
Dear Ramanji,
No problem but why you are delaying? Go ahead and close it at first.
Narinder Singh
My wife on retirement got an Rs 10.80 lac towards retirement benefits. She opened SCSS a/c with deposit of Rs 9 lac within one month. Can she now deposit the balance 1.8lac after 4 months of retirement?
Basavaraj Tonagatti
Dear Narinder,
She can’t invest now up to her 60 years of age. Because 4 months already lapsed for her retirement.
N.IYER
Like with SCSS, is any IT rebate available on investments in POSTAL MIS ?
Basavaraj Tonagatti
Dear Iyer,
NO.
Neelam
Hello Sir…. Thanks for your post. My question is if I open scss account with a bank and in future that bank declares bankruptcy or fails completely, do I stand to lose money as only 1 Lakh is insured in banks.
Basavaraj Tonagatti
Dear Neelam,
This product is backed by Government. Hence, even if the bank goes bankrupt, your money is safe. Bank is acting like an agent.
Neelam
Thanks for your quick response. I went to ICICI Bank they said banks could not fail as it has never happened and if they fail only 1 Lakh is insured even if I have SCSS Account. I am in a dilemma. Please clarify.
Basavaraj Tonagatti
Dear Neelam,
Don’t worry, they are just a facilitator of SCSS.
Sekar
As per Scss rules the nomine will get only SB rate of interest after death of the depositor. If interest was credited by auto credit facility the paid interest will be recovered at the time of claim.
Basavaraj Tonagatti
Sekar-Thanks for sharing this clarification.
Guru
Namaste Sekar,
Is this documented anywhere? I don’t see any written rule like that. Are the post office cheating the nominee by doing that?
Thanks
Nirav
If one person invest in September in SCSS scheme then his interest will be be split in two financial years. Is this true?? Can i save tax by this?
Got idea from below link NDTV
[4 easy ways to avoid TDS on fixed https://www.ndtv.com/business/4-easy-ways-to-avoid-tds-on-fixed-deposits-326408
Example: if i invest in scss scheme 15 lakhs on 1-sep-18 then interest 124500/- would be split in two financial yrs.
2018-19 – 62250/-
2019-20- 62250/-
Plz guide me..
Basavaraj Tonagatti
Nirav-Avoiding TDS means avoiding tax?? The article speaks about AVOIDING TDS just to catch many investors. But fail to say that avoiding TDS does not mean avoiding tax.
Sanchita Mukherjee
SCSS was of my mother. She expired on 040417i the sole nominee furnished all documents required for the payment. But till date I haven’t received the invested sum and no interest also is being paid till date? Kindly explain what rate of interest I as nominee will receive for this delay of one year.
Basavaraj Tonagatti
Sanchita-They have to pay the applicable SCSS interest rate as the delay is from their end but not from you.
Sanchita Mukherjee
Is Sanchita Mukherjee supposed to get the initial deposit as well as the interest for the delay. What rate of interest is applicable in this case. Kindly inform.
Regards
Basavaraj Tonagatti
Sanchita-For delayed period, they pay you savings account interest.
Sanchita Mukherjee
Sir
Kindly inform, will there be any deduction on the initial deposit, at the time of the delayed payment by the post office??
Regards
Sanchita Mukherjee
What should be done in case there are deductions made by post office on the initial deposit? Kindly advise.
Regards
Basavaraj Tonagatti
Sanchita-Let them give in writing.
Basavaraj Tonagatti
Sanchita-NO WAY.
A K Misra
Basavraj,
Thanks for this very useful post.
Where husband and wife both are in service, after retirement can each of them have a SCSS account (jointly with the spouse) upto Rs. 15 lakh each (total 30 lakh), investing out of their own funds (respective retirement dues received) – or a total of Rs 15 lakh only is permissible in aggregate for both of them?
Would appreciate a clarification.
Regards.
Basavaraj Tonagatti
Misra-Rs.15 lakh limit is for an individual. Hence, both can invest separately Rs.15 lakh each.
Prasheeta
Whether SCSS is eligible for tax benefit ? Will they get any deduction under chapter VI
Basavaraj Tonagatti
Prateesha- Refer above post for tax benefits.
Kumud
In case of a joint account and death of primary holder before original maturity , can the spouse who is not a senior citizen at the time of death , continue the account and avail interest applicable to the scheme, can the spouse also extend the account post original maturity , for another 3 years , irrespective of age ? Branch opinion is that savings rate of interest is applicable on such account , post date of death to closure .How do I counter this since not explicit it in the circular .
Basavaraj Tonagatti
Kumud-She has the all rights to continue or discontinue.
Kumud
Appreciate the super quick revert!! Thankyou. I read your revert as she can continue and would be entitled to rate of interest applicable to SCSS , if continued .
Pritesh
Hello Sir,
Is there any way by which I can track my Senior citizen saving account online , like normal saving bank account?
Basavaraj Tonagatti
Pritesh-If you invest through banks, then MAY be. But don’t expect that from Post Office.
Pritesh
Thanks Sr, done from PNB but they are not providing any such facility, can you share me some information where I can use to track such information?
Basavaraj Tonagatti
Pritesh-Please check with the Bank itself.
Gurmeet Pal
Too much hassle: Does not renew automatically nor any intimation sent on maturity, nominee or spouse will have to go through lot of hassles to encash the same on death of person opening the account, etc.
Basavaraj Tonagatti
Gurmeet-Avoid Post Office (if you are expecting prompt service) and opt for Banks (which offers SCSS).
sudakar
My wife aged 58 retd govt employee will be getting rs 30 lacs as retirement benefits.
husband aged 54 doing self business very small .
Can she open scss for rs 15 lac jointly with husband .
Can husband open another scss for another rs 15lac jointly with wife . All this amt is r
Intetrst earned in wife+husband
Basavaraj Tonagatti
Sudakar-She can open within a month of getting that amount. As you are not senior citizen, you are not allowed to hold jointly.
Alamelu
Sir is it possible to open senior citizen account for a person who got v r s from any private company .age 58.
Basavaraj Tonagatti
Alamelu-Refer the above eligibility conditions.
Sk Gupta
Info given is outdated or not updated as on date.
Request to update information given for various scheme’s or delete old articles which have lost r elevence
Thanks
Basavaraj Tonagatti
Gupta-Any changes in the SCSS NOW???
Rajendra Bhandare
Sir I defence retired personnel from Army with Age 48 years and retired in 39 Nov 2017 .I wish to invest certain amount in SCSS in post office. But they refuse and rejected my case being age factor. in above article clearly mention no age restrictions for defence personal retirees. What can I do. Can u provide me any letter issued by concerned authority.
Basavaraj Tonagatti
RAjendra-Simply, ask them to give the same in writing. Check your service is considered as civilian Defence employees. If so, then you can’t.
Dr..Anuradha
Sir my parents have scss for 13 lakhs, now my father wants to open another scss account for my mother. Post office people say that only two lakhs can be invested because th maximum limit is 15 lakhs, the 13L is jointB . But my argument is that the initial invester being my father ,it’s ok to invest another 15 L, kindly clarify
Basavaraj Tonagatti
Anuradha-Who is the first account holder?
Mohd pasha
First depositor/applicant with the above account can invest upto 2lakhs(15 lakhs total)
Second applicant/joint applicant can invest upto 15 lakhs in total.
Any amount invested above 15 lakhs if found will be refunded without paying any interest.
Interest credited is taxable. TDS applicable if
Mohd pasha
From 2016-17 banks are also authorized to provide scss these banks are
State Bank of India
Andhra Bank
Allahabad Bank
Bank of India
Bank of Baroda
Canara Bank
Corporation Bank
Central Bank of India
Dena Bank
UCO Bank
Syndicate Bank
Union Bank of India
IDBI Bank
Vijaya Bank
Indian Bank
Punjab National Bank
Indian Overseas Bank
United Bank of India
Bank of Maharashtra
ICICI Bank
Note : One can apply scss through these banks also. However I got to know that ONLY SELECTED BRANCHES WHICH DEAL WITH GOVERNMENT ACCOUNTS can provide you with senior citizen savings scheme.
You may add this to the post.
Basavaraj Tonagatti
Thanks for sharing. Sure I will add it. But it is known fact.
Manik halder
Sir my father had died after one year invest post office scss scheam, how i nominee get return amount which rate of interest after death till now with principal amount?
Basavaraj Tonagatti
Manik-Visit the post office at first and inform about the death.
Manik halder
Sir,I alredy inform post office about my father death but I wanted to know as per post office rate of interest ruls calculate interest over principal amount which i retuned from post office after death scss account
Basavaraj Tonagatti
Manik-Up to the death they pay the regular SCSS interest. Post-death you are eligible only for the savings account interest rate.
Vasavan
Sir, I am 55 years old, in service and would like to invest Rs.15 lakh from my savings in my Mothers name who is 77 years old in SCSS. My widowed Mother is a House wife and does not have any income on her own. Is investing from my savings in SCSS in my Mother’s name permissible? If so, is it taxable on me or my mother? kindly advice.
Basavaraj Tonagatti
Vasavan-Yes, you can gift that money to her and you can invest in her name. The return from SCSS will be taxable to her.
Vasavan
Sir,
Thanks a lot for your advice.
B K Gupta
Sir
I ex sarvice man (Army) B K Gupta my yage 38 years . Kya hum siniyar citizan ke tahat kitna envest kar sakta hau. Intrest rate kya milega.MIS scime mai.
Basavaraj Tonagatti
Gupta-The quantum of investment eligibility is same to you also.
Mada Mohan
Can one person invest both in postoffice and designated bank in SCSS scheme? Suppose I have invested RS.15,00,000/- in Postoffice SCSS scheme and after that again want to open SCSS account in a designated bank for further investment. Is it possible?
Basavaraj Tonagatti
Mada-Wherever you invest, the combined limit must not be beyond the specified maximum limit.
shyamal kumar dutta
if a scss ispaid to its nominee and the amt payble is taxable whether income tax is deducted at source?
Basavaraj Tonagatti
Shyamal-As per me, the death benefit is not taxable to nominee.
raghunath
my mother have deposit with canara bank under senior citizen savings schemee for 15 lac last month she died and i am nominee so bank paid my money back 15 lac but said i will not get broken period intrest means bank paid amount on 15/09 /2017 but paid intrest only upto 30/08/2017 they say we have to pay only monthly not for broken period
Basavaraj Tonagatti
Raghunath-Let them give the same in writing.
shyamal kumar dutta
when a nominee is paid the maturity value of a scss is tax deducted at source
Basavaraj Tonagatti
Shyamal-NO.
shyamal kumar dutta
when a nominee is paid the matuirity value of ascss tax is deducted at source
Basavaraj Tonagatti
Shyamal-Unable to understand your sentence. Can you please elaborate a more?
Haresh
Dear Sir
My question regarding SCSS: Suppose in below Scenario-1
Scenario- 1
Account- 1 (Jointly)
First Holder : Husband
Second Holder : Wife
Nominee : Son
Total Amount Invested : 7.5 lakhs
Account-2 (Jointly)
First Holder : Wife
Second Holder : Husband
Nominee : Son
Total Amount Invested : 7.5 lakhs
Total Amount invested in A/C 1 + 2 = 15 Lakhs
Question : from above Scenario if either Husband in Account-1 OR Wife in Account-2 died before maturity of account,
Can the second holder of Account-1 & the second holder of Account 2 continue SCSS Account as a primary account holder in same condition(i.e. Interest Rate) as when opened account because the the maximum overall limit of the second holder not cross Rs.15 lakh
Basavaraj Tonagatti
Haresh-Yes, they can continue as the combined limit not crossing Rs.15 lakh.
Dipankar
I have a SCSS Account in SBI. Quarterly interest is credited to my Savings Account in the same Branch. Now I want to change the Savings Account to another account of mine at a Branch of SBI close to my residence. My Bank (original Branch) says that payout account cannot be changed under any circumstances. Is this correct? What should I do?
Basavaraj Tonagatti
Dipankar-I don’t think this is a big issue. Let them show the rule book.
PRANAB KUMAR PANDA
I am an Ex servicemen who complete of 24 yrs of full service and now retired and my age is 55 yrs old can I eligible to open an account as senior citizen saving scheme ?
Basavaraj Tonagatti
Pranab-YES.
Gaurav
Is the interest earned in the savings account also taxable ?
Basavaraj Tonagatti
Gaurav-Yes, interest earned from the savings account is taxable to you. However, you can claim tax benefit under Sec.80TTA up to Rs.10,000. Rest of the earning is taxed as per your tax slab.
RAJENDRA GOSWAMI
Refer message above the investment proposed in name of wife as first holder.
RAJENDRA GOSWAMI
I have invested Rs.1500000 in SCSSS and Rs 900000 in MIS. Can my invest Rs.15 Lacsseperately in his name from my savings.
Basavaraj Tonagatti
Rajendra-YES.
Pinaki debnath
I am a retired defence personnel and want to invest in MIS more than 9 lacs. Is there any policy letter regarding retired defence personnel can invest more than 9 lacs in MIS. if available kindly uploaded PDF.
Basavaraj Tonagatti
Pinaki-Why not SCSS?
Pinaki debnath
I have approached post office in Port Blair. They said that we don’t have letter regarding retired defence personnel can invest more than 9 lacs. so i now approach to your site.
Basavaraj Tonagatti
Pinaki-Refer my earlier post on MIS at “Post Office Monthly Income Scheme or MIS – A complete guide“.
sanjay kumar vishwakarma
Sir,
My mother is 80 years old & presently she is bed red-an due to his Spine broken. She had open Senior citizen scheme dt. 22-04-16. She is not able to collect quarterly interest. In this condition what can I do ????
NB : THE ABOVE MATTER IS MY MOTHER.
Basavaraj Tonagatti
Sanjay-I thinks she has to appointee someone. But regarding the process, please contact the local post officials.
Neeraj Kumar
Good day,
My father has invested 15 Lac rupees in Senior citizen scheme and it is the only income he has.So his total income is less than tax bracket income.
For last few quarter TDS is deducted by post office,As you have mentioned that for senior citizen form 15H can be filed to avoid TDS,I wish to ask if this option is still available.Post office is not listening so can you give me some official address where i can quote him.
Thanks
Neeraj Kumar
Basavaraj Tonagatti
Neeraj-You can still submit Form 15H and avoid TDS. However, even if they deducted TDS, you no need to worry. Let him file IT return and get back the TDS. Now it is easy.
Hariharan P V
I am a senior citizen. But my wife is not a senior citizen. Can I open SCSS jointly (as 1st & 2nd applicant) and nominate my daughter? For nominee what all documents to be submitted? Confirm
Basavaraj Tonagatti
Hariharan-Both must be senior citizen to invest jointly in Senior Citizen Savings Scheme or SCSS.
R.Patnaik
Both the spouse shouldn’t be senior citizen inorder to open scss deposit.wife or husband may be below 60years of age.
Basavaraj Tonagatti
Patnaik-Is it? May I know the source of this information?
M.S.Susheela
I have opened a S CSS account in one of the Post office during November.2011 and the amount is Rs.5 lakhs. I have already availed the Tax benefit under Section.80.C. Now on maturity in November.2016 the account has been extended further 3 years.Now my doubt is again the benefit under section 80.C for this account can be availed. Please guide me with your valuable advice. Thanking you
Basavaraj Tonagatti
Susheela-If you extended the Post Office Senior Citizen Scheme or SCSS, then this will not be claimed for tax beenfit under Sec.80C as a fresh investment. You have to close the account and realise the money. Such realised money if invested, then it will be treated as fresh investment and can be claimed for Sec.80C benefits.
M.S.Susheela
Thanks for the guidance
Dinesh Singh
My father opened a SCSS account in post office of rs 1500000 on 28.4.2017 for 5 years. My mother is second ac holder. But on 13.5.2017 my father died. So pls tell me about further activity .
Basavaraj Tonagatti
Dinesh-You have to update your father’s demise to post office and let your mother continue the same in her name.
S. K. Das
I opened a senior citizen savings scheme on 27-02-17 of Rs.15 lac
financial year 16-17. Process of 80C rebate may be intimate me at the earliest.
Basavaraj Tonagatti
Das-I am unable to understand your comment.
jawale gs
Sir I invest 9 likh in pomis and I wish to 5 lakh in scss. Can I nicest sir please tell me.
Basavaraj Tonagatti
Jawale-Without knowing your requirement, how can I that it is the best investment or not?
SUBIR SEN
My mother opened a SCSS account in post office of rs 24000 on 13.8.2011 for 5 years. so account is matured on 13.8.2016. the interest paid of this account up to DEC 15. she is dead on 12.3.2016. i have claimed this amount as a nominee. as on 22.10.2016. post office settle the claimed amount as on 29.4.17. post office paid only rupees 24639. but i think post office paid less interest. so please tell me that post office paid right amount to me. if not then what exact amount should post office pay.
AT THE TIME OF OPENING OF THIS ACCOUNT TE RATE OF INTEREST IS 9%
Basavaraj Tonagatti
Subir-You have to be in touch with Post Office if you felt there is a mismatch in interest payout.
amit K sri
can i submit form 15 H to any other post office branch apart than my home branch?
Basavaraj Tonagatti
Amit-Why can’t submit in the post office where you have invested?
nitesh
so we can both invest total 39 lac 15 lac on my name and 0ther 15 lac on my wife’s name and other 9 lacks in mis scheme please clear my doubt
Basavaraj Tonagatti
Nitesh-YES.
raja
Sir, Pls clarify Example when I opened senior citizen scheme rate of interest 9 percent Is it applicable Up-to maturity
Basavaraj Tonagatti
Raja-YES.
R.V.Mirji
I have invested Rs:150000 in scss at Canara bank today I wanted qtrly interest paid to my sb ac at the same bank but they have given me the certificate showing maturity value after 5 yrs how should I go about that. Pl guide.
Basavaraj Tonagatti
Mirji-Maturity date is 5 years but interest will be payable on quarterly basis. You no need to worry.
Ravindra Nath Tiwari
Sir,
I am Ex-Serviceman of IAF and taken VRS after completion of 20 yrs. On retirement, I purchased SCSS in Mar 2012 and due to maturity in Mar 2017. However I want to re-invest/extend it for 3 years, whereas the post office is not taking interest to do so ( as they are mentioning there is some change in policy which I am not getting anywhere), whereas I am still in process. Pl tell me that whether VRS(Defence personnel) people were authorised for extension of SCSS for 3 yrs as stipulated and what will be the percentage of interest for 3 yrs existing or the old one. You guidance on the subject will help me to seek the extension. Thanking you
Basavaraj Tonagatti
Ravindra-The extension rules are same as they were earlier. I think the officials simply in no mood to work. You have all rights to extend it again for another 3 years. Interest rate during such extension period will be as per the prevailing rate of interest after 5 years maturity.
pratik sengupta
Sir,I have a query to you
1.Is SCSS scheme for once in life for maximum period of 8 years(15 lakh) with extension or I can reinvest as a same person after 8 years over?
Basavaraj Tonagatti
Pratik-You have to freshly invest once the account matures. While investing again, the maximum limit including all SCSS schemes will not cross Rs.15 lakh. Also, for your information, it is not 8 years product but 5 years.
manish tomar
My father just got retired & he is planning to invest 15 lake in SCSS & 9 lakh in POMIS & he also have income source of 10000 approx by rent of one old property & he is using joint account with my mother . did the total income he will earn will be taxable or not because a part from this there is no other income income source for him.
Basavaraj Tonagatti
Manish-Taxable income depends on the interest he earn. Check once he invest and the whole year interest earning and along with that other sources of income.
karthik
can we withdraw the interest in cash directly? or do we need a savings account for interest credit?
Basavaraj Tonagatti
Karthik-They credit to your savings account.
Karthik
Thanks..do do I need to fill up a form for saving accts in post office? or do they open both saving and SCSS with the single form?
Basavaraj Tonagatti
Karthik-Check post office regarding forms.
Haridas Kundu
We were both service holder.I opened SCSS account of Rs.1500000 with my wife as second holder. My question is can my wife open another SCSS account of Rs.1500000 being 1st.holder she and 2nd.holder me?
Basavaraj Tonagatti
Haridas-Yes, she can open one more account for Rs.15,000. Because as per rule, in joint accounts, the limit of Rs.15,000 is drawn based on who is first holder. Your wife is second holder. Hence, she can open one more account.
Dr H S Matharu
I have invested Rs 1.0 lakhs in SCSS account with post office. On expiry of 5 years in December, 2016 I have extended it for another 3 years. My question is whether the amount will qualify under Section 80C for the Financial Year 2016-17.
Basavaraj Tonagatti
Matharu-YES but up to Rs.1,50,000.
Rajiv Kumar
Hi, great article on investment. I am a prospective investor and was wondering, is cibil score important for investors as well because it is a dreaded word in the borrower’s community?
Basavaraj Tonagatti
Rajiv-CIBIL score not at all related to INVESTMENT but only for CREDIT.
Sabir
Hi,
Need to tap your wisdom in a matter pertaining to Post Office Senior Citizen Saving Scheme (SCSS). My parents opened a SCSS account with India Post in February 2005 with an amount of Rs. 4 Lakhs which got matured in February 2010. Subsequently, it was extended for 3 years till February 2013. My dad i.e. the second / joint holder died in January 2012. We, accidentally, came to know of the existence of this SCSS account only last week. I am aware that there is no compounding of interest i.e. interest on interest in such deposits.
My question is: Would India Post continue to pay the quarterly interest from date of final maturity after the extended period is over (from February 2013 till date) ?
Basavaraj Tonagatti
Sabir-After maturity if you not renew or liquidate, then they pay the savings account interest rate.
Biko
Hi.
My father has a SCSS IN INDIA POST with the second account holder being my mother. My father expired last month. Can my mother continue the same account. She is not a senior citizen. Kindly advice
Basavaraj Tonagatti
Biko-If she is not senior citizen, then she can’t continue.
Pradeep
Dear Sir,
My father is investing 15 lakh in SCSS with my mother as joint account holder. He has other income also and the net annual income for him will be > 4lakhs. In order to reduce the tax liability, can we divide the interest amount obtained from SCSS between my mother and father for reducing the tax liability.
Basavaraj Tonagatti
Pradeep-If it is joint account, then YES.
Aryan
My father has done SCSS in post office and the scheme got matured one year before today. He has missed to break that , I want to know wull he get the intrest on the deposited amouny if yes then what will be the rate of intrest on that deposited amount.
Basavaraj Tonagatti
Aryan-He will be eligible for post office savings account interest rate ONLY.
Rengarajan Iyer
Those tips you have given are very useful. Thanks.
RiteshM
Sir,
What is the ideal asset allocation for a senior citizen?
The case in question is my Uncle. He is aged 64, single and retired. He stays with his relative and his only source of income is rent of Rs. 23,000/- p.m. from his let out property.
He is worried about future as he has been detected with diabetes and resultant increase in recurring medical expenses. He has a New India medi-claim policy though.
He is now planning to sell his property since he wants to enjoy his remaining 12-15 years of life without worrying about periodic cash flows. He will get approx. Rs. 90 Lakhs from selling the property. Indexed cost of acquisition will be around Rs. 10 Lakhs since the property was purchased at nominal value some 25 years ago.
I have a couple of questions
1. Whether he will have to pay tax on this Rs. 90 Lakhs at 20% (being long term capital gain) or at 30% (since income exceed Rs. 10 Lakhs)?
2. I have suggested him to invest Rs. 15 Lakhs in SCSS. However, I am not able to advise him about investing remaining amount ( Approx. Rs. 55 Lakhs if taxable as LTCG or Rs. 45 Lakhs if taxable at normal rates). What should be his ideal asset allocation ?
Thanks
Basavaraj Tonagatti
Ritesh-1) Based on LTCG he got, he has to pay tax.
2) Without knowing his much of requirement, it is hard for me to guide.
RiteshM
Sir,
As you should be aware, social and financial condition of senior citizens in India is far from satisfactory.
Well, he requires Approx. Rs. 40,000/- p.m. from the remaining amount of Rs. 55 Lakhs. He is conservative investor but can take equity exposure upto 10 to 15% of this amount. He also wants this investment to be most tax efficient to the extent possible. (no TDS since it requires keeping track of certificates and claiming refund through ITR). He will continue to stay with his relative for rest of his life.
Thanks
Basavaraj Tonagatti
Ritesh-If he already decided the equity exposure and debt exposure, then what is his doubt? Also, do you mean avoiding TDS means avoiding TAX??
RiteshM
No. I don’t mean avoiding TDS means avoiding Tax.
My point is a senior citizen may find it difficult to keep track of TDS certificates and subsequently claim refund through ITR. It may happen that TDS deducted by bank on his deposit may be much higher than his actual tax liability.
In such scenario, are there additional investment avenues available if he doesn’t go for equity?
Is investing in Varishtha Pension Scheme, Post office MIS, immediate annuity plan from LIC like Jeevan Akshay etc. are better ways than going for bank FD? (So that TDS part can be taken care of)
Thanks
Basavaraj Tonagatti
Ritesh-Using Form 26AS, you can easily get the full history of TDS. The product you mentioned are taxable income. You can invest in products you mentioned, but do remember that each such products have their own positives and negatives.
RiteshM
Thanks for reply.
I request you to add a separate topic on “Investment planning for Senior Citizen” in future since I believe this category of investors (which is growing in size) is not properly being given financial knowledge and is susceptible to fraud and deceit.
Basavaraj Tonagatti
Ritesh-Thanks for your advise.
Shalil
I have approx 6 lacs in my salaried savings account . Can I invest this on behalf of my father in sccs in a state bank for ex. And then the interest which is received quarterly can it be then invested in for ex.mutual fund SIP
Basavaraj Tonagatti
Shalil-Yes, you can do so. But be specific when you need money.
Shalil
Gr8 that helps bro..thanks for the advise…:)
Raj
// If the total amount including interest payable is up to Rs.1 lakh, it may be paid to the legal heirs on production below documents. //
What if the amount is more than 1 Lakh?
Basavaraj Tonagatti
Raj-If it is more, then you have to produce the legal heir certificate and death certificate along with above said certificates.
SAIKAT
I am in 30% tax bracket, my father has no taxable income, he is 60 and working(no pension, no LIC, no fd, no EPF, no PPF, only one house, 1 mediclaim). Can I give him money to invest SCSS? so that he and my mother gets steady income every quarter/month? or shall I invest in any mutual fund for fixed income every month.
Basavaraj Tonagatti
aikat-Why you need constant income? If your parents depend on you then whether you invested in one’s emergencies like life, health and accidental isnruance?
saikat
I just started my job 1 month back, I have taken a mediclaim for my parents NICL, 2 Lakhs, which i will increase next year to 3lakh/per person. they do not have any life insurance. right now my goal is to provide them steady cash inflow every month/quarter, atleast 10/15 thousand. what are my options? SCSS/liquid funds? I am very new in investments, so have less idea. please advice.
Basavaraj Tonagatti
Saikat-Whether you have lump sum cash to invest?
SAIKAT
I do not have lumsum cash unfortunately. I can invest via SIP. i do not have much savings now, as this is just my first month in job. I am planning to take
1. term plan
2. mediclaim
3. elss (tax and long term wealth)
4. large cap (for long term)
5. liquid fund ( for parents income)
6. short term debt fund. (have education loan, after 2 years it will start. 3 lakh principal)
7. ppf (minimal value)
Basavaraj Tonagatti
Saikat-Go ahead. But never try to put all eggs in one basket.
Padmavathi
sorry my husband doesnt have income. I will be needing around around 18 to 20 k per month. Please advise
Padmavathi
Dear Sir
I am going to retire in 16 months, my question is I will be getting approx 25 Lakhs, plus Icici superannuation fund and EPF pension. I want keep around 6 to 7 lakh fixed so that after around 20 yrs my both the chidren will get equally good money. How do I deposit my money and my husband is 60 yrs old, he does have income
Regards
Basavaraj Tonagatti
Padmavathi-There is no such fixed income product which offers you around 20 years maturity. However, if the goal is long term, then I suggest to you to use around 40% in short term debt fund and rest 60% in equity mutual funds. Regarding the monthly income for your husband, I suggest you use postal MIS or SCSS schemes.
Padmavathi
Thank you so much. Also i read the other postings, so interesting and useful
Thanks a ton !
Regards
Padmavathi
Basavaraj Tonagatti
Padmavathi-Pleasure 🙂
dharmen
IF THE HUSBAND GIFTS 15 LACS TO HIS WIFE FOR INVESTING IN THIS SCHEME, WHETHER THE AMOUNT 15 LACS OR INTEREST EARNED ON IT WILL BE TAXABLE FOR ANY OF THEM? [WIFE HAS NO OTHER INCOME]
Basavaraj Tonagatti
Dharmen-It will be taxable income to husband. However, any income earned from the SCSS interest will be taxable as per wife’s tax status.
Shalabh Srivastava
Hi Basu,
Thanks for sharing this articles 🙂 its really helpful.
Thanks,
Shalabh
Basavaraj Tonagatti
Shalabh-Pleasure 🙂
Guru
But still the interest earned is taxable right? And wat about the senior citizen saving scheme options available in banks like SBI? are they better than post office?
Basavaraj Tonagatti
Guru-Interest earned is taxable. SCSS available with banks also offers the same feature. I already mentioned the banks, who offers this.
Mansu
What are documents to be submitted by nominee to bank for refund in case of death of depositor for deposit of Rs 15 lakh in scss? Thanks
Basavaraj Tonagatti
Dear Mansu,
Usual death certificate, KYC details and few more documents (based on case to case).