Income Tax laws are not only meant to tax your income but also to encourage you to save or invest money. Therefore, the Income tax Act allows tax benefits on various investment schemes. Under section 80C of the I-T Act, provisions on several tax saving investment options like EPF, PPF, NSC etc. are mentioned. However, arguably the most lucrative option in terms of ROI is ELSS or Equity Linked Savings Scheme. This guide will help you understand important things like investment procedure, investment limit and tax benefits, etc.
Senior citizen savings scheme is an investment product sponsored by Indian Government. This account can be opened for an Indian senior citizen and can also be jointly held by spouse regardless of age of secondary member (spouse).
It is simple to apply for opening an Senior Citizen Savings Scheme account. Document requirements are minimal, and the account can be opened at any authorised bank or any post office. An application for account opening need to be filled up in Form A. The deposit amount, along with age proof is required along with the application. The deposit amount needs to be in multiple of one thousand rupees and age proof. The account can be opened with an initial maturity of 5 years. The depositor is allowed to extend the account for a further period of three years after 5 years. For this, an application in Form B should be produced within a period of one year after the date of the maturity period.
To open an account under SCSS investment scheme, documents (KYC details) required are minimum, as mentioned below:
Documents (self-attested copies) that can be submitted to validate ‘age’ are:
Interest can be drawn through auto credit into savings account standing at same deposit office, through PDCs or Money Order. In the case of SCSS accounts, quarterly interest will be applicable at all CBS Post Offices.
*Quarterly interest of SCSS accounts standing at CBS Post offices can be credited in any savings account standing at any other CBS post offices.
Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1-4-2007, and H&R Block India can help you get optimum tax benefits out of your investment in this scheme. You can use any of the three Income Tax Filing Services for salaried individuals like Free Online Income Tax e-Filing, Expert Tax Preparation Services and In-person Tax e-Filing.
Under SCSS investment plan, premature closure is permitted at the end of 1 year on deduction of an amount equal to1.5% of the deposit & at the end of 2 years 1% of the deposit.
After maturity i.e. at the end of 5 years, the account can be extended for further 3 years within 1 year of the maturity by giving an application in the prescribed format. Under such scenario, an SCSS account can be closed at any time after the expiry of one year of extension without any deduction.
|List of Authorised Banks for Senior Citizen Savings Scheme|
|Allahabad Bank||IDBI Bank||Syndicate Bank|
|Andhra Bank||Indian Bank||UCO Bank|
|Bank of Maharashtra||Indian Overseas Bank||Union Bank of India|
|Bank of Baroda||ICICI Bank||United Bank of India|
|Bank of India||State Bank of India||Vijaya Bank|
|Corporation Bank||State Bank of Mysore|
|Canara Bank||State Bank of Bikaner and Jaipur|
|Central Bank of India||State Bank of Patiala|
|Dena Bank||State Bank of Travancore|
|Punjab National Bank||State Bank of Hyderabad|
So, as you can see, SCSS is a risk-free investment scheme which also offers a good return on investment. We hope that this investment guide has given you all the information that you need to invest in this lucrative scheme.