Thursday, March 26, 2009
Information about Senior Citizen's Scheme, 2004
The scheme is available for citizens above 60 years of age; however a provision has been put in place for individuals who have crossed 55 years of age. Such individuals may invest subject to the conditions that,
* The person has retired under a voluntary retirement scheme or a special voluntary retirement scheme on the date of making the investment,
* The investment is made within three months of the date of retirement,
* And a certificate from the employer, indicating the fact of retirement, retirement benefits, along with period of such employment with the employer, is attached with the application form.
* Non-Resident Indians and Hindu Undivided Families are not permitted to invest in the scheme. If a depositor becomes a Non-resident Indian subsequent to his opening the account and during the currency of the account under the SCSS Rules, the account may be allowed to continue till maturity, on a non-repatriation basis and the account shall be marked as a Non-Resident account [Rule 13 and GOI letter F.No.2/8/2004/NS-II dated June 19, 2006)
* Senior Citizens Savings Scheme (SCSS) is a Government of India Product.
* 9% interest offered to depositors.
* Since the product is offered by Govt of India, this product is one of the most Safest Investment Option.
* Premature closure of account is possible after one year from the date of opening the account.
* Mode of holding: The depositor can hold an account either individually or jointly with his/ her spouse
* Maturity: The scheme has a tenure of 5 years. The account can be extended for a 3 year period by making an application.
* Tax benefits: The interest income from the scheme is fully taxable.
* Senior Citizens Saving Scheme 2004 and the Post Office Term Deposit Account have been added to the basket of saving instruments under Section 80(C) of the Income Tax Act.
A lot more questions are answered in the FAQ available on the RBI page (link)
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