Senior citizen saving scheme is best interest paying scheme for eligible senior citizens.Investment in this scheme is also eligible for deduction under section 80C. Interest in this scheme is 9.3 % per year ,which is quarterly compounding. Interest earned on this deposit is taxable under income tax act.
Salient features of the Senior Citizens Savings Scheme, 2004:-
Tenure of the deposit account 5 years, which can be extended by 3 years.
Rate of interest 9.3 per cent per annum
Frequency of computing interest Quarterly
Taxability Interest is fully taxable.
Whether TDS is applicable Yes. Tax will be deducted at source.
Investment to be in multiples of ` 1000/-
Maximum investment limit ` 15 lakh
Minimum eligible age for investment 60 years (55 years for those who have retired on superannuation or under a voluntary or special voluntary scheme). The retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to invest irrespective of the age limits subject to the fulfillment of other specified conditions
Premature closure/withdrawal facility Permitted after one year of opening the account but with penalty.
Transferability Not transferable
Tradability Not tradable
Nomination facility Nomination facility is available.
Modes of holding Accounts can be held both in single and joint holding modes. Joint holding is allowed only with spouse.
Application forms available with Post Offices and designated branches of 24 Nationalised banks and one private sector bank
Applicability to NRI, PIO and HUFs Non Resident Indians (NRIs), Persons of Indian Origin (PIO) and Hindu Undivided Family (HUF) are not eligible to open an account under the Scheme.
Transfer from one deposit office to another Transfer of account from one deposit office to another is permitted.
tax 'N' accounts people
Tarun Kumar Gupta
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