Tax Savings: Senior citizens can avail tax exemption up to ₹ 1.5 lakh, Check Scheme Complete Details

Tax Savings in FY25, SCSS: The goal of SCSS is to present a daily revenue to senior citizens after retirement. In this scheme, taxpayers can declare tax deduction on deposits up to Rs 1.5 lakh yearly beneath Section 80C.

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Tax Savings in FY25, SCSS: Government Scheme Senior Citizen Savings Scheme (SCSS) is a greater scheme for tax financial savings of senior citizens. This scheme is for Indian citizens above 60 years of age. The goal of SCSS is to present a daily revenue to senior citizens after retirement. Under the scheme, taxpayers can declare tax deduction by depositing up to Rs 1.5 lakh yearly beneath Section 80C. Let us let you know, at present there are two forms of tax regimes within the nation. New tax regime and previous tax regime. Tax deduction of part 80C can be claimed solely within the previous tax regime.

SCSS is offered in authorities/non-public sector banks and publish workplaces. Being a authorities scheme, the returns on it are assured. The deposit quantity matures after 5 years from the date of opening of SCSS account, however this tenure can be prolonged solely as soon as for 3 extra years. From January 1, 2024, this scheme is providing 8.2 p.c curiosity yearly.

Under SCSS, curiosity is paid each three months, guaranteeing maturity of your funding. Interest shall be credited on the primary day of each April, July, October and January.

SCSS: How a lot tax shall be saved?

SCSS has a greater tax exemption scheme. Tax exemption can be claimed beneath Section 80C of the Income Tax Act, 1961 on annual deposits up to Rs 1.5 lakh in SCSS. Tax legal responsibility on curiosity acquired on SCSS shall be as per the tax slab relevant to people. If the curiosity revenue in a monetary yr is greater than Rs 50,000, then Tax Deducted at Source (TDS) shall be deducted. Investment in SCSS is relevant from 2020-21 onwards until TDS deduction. If the curiosity revenue doesn’t exceed the prescribed restrict, then you definitely can get reduction from TDS by submitting Form 15G/15H.

Where will the account be opened, what’s the most deposit?

The minimal deposit in SCSS is Rs 1,000. Whereas most Rs 30 lakh can be deposited. Senior Citizen Savings Scheme account can be opened in any licensed financial institution of the nation or in all Indian publish workplaces. For this, the account opening type can have to be crammed and submitted together with the copy of KYC doc, which incorporates passport dimension {photograph} together with id card, deal with proof and age proof.

Under SCSS, an individual aged 60 years or extra can open an account. If somebody is 55 years or extra however lower than 60 years and has taken VRS, then he can additionally open an account in SCSS. But the situation is that he can have to open this account inside one month of receiving the retirement advantages and the quantity deposited in it shouldn’t be greater than the quantity of retirement advantages.

Know mature and pre-mature guidelines

Please notice that SCSS account shall be closed in case of loss of life of the account holder earlier than maturity and all of the matured revenue shall be transferred to the authorized inheritor/nominee. For loss of life declare, the nominee or authorized inheritor can have to submit a written utility within the prescribed format together with the loss of life certificates to facilitate account closure.

Nomination facility is offered on the time of opening and shutting of accounts in Senior Citizen Savings Schemes. This account can be transferred from one publish workplace to one other. In this the account holder can do untimely closure. But no curiosity shall be given if the publish workplace account is closed inside 1 yr of opening. If curiosity has been paid, it will likely be recovered from the principal quantity. On closing the account after 1 yr and earlier than 2 years, 1.5 p.c of the deposit shall be deducted. Whereas if the account is closed after 2 years of opening and earlier than 5 years, 1 p.c of the deposit quantity shall be deducted from the principal quantity.

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