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Senior Citizen Savings Scheme Details (SCSS)

Last Update Date : April 04, 2019
Estimated Read Time: 7 min

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

What is SCSS?

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).

Who can open Senior Citizen Savings Scheme Account?

  • The SCSS account can be opened by an individual of the age of 60 years or more.
  • The same can also be opened by an individual, having an age in between 55 and 60 years, who has taken early retirement (VRS). The condition here is that such account should be opened within 1 month of the receipt of retirement benefits and investment amount should not surpass the amount of retirement benefits.
  • Joint accounts with spouses can be opened by fulfilling age criteria of the primary depositor. There is no bar on age criteria of the second applicant.


  1. Retired personnel of Defence Services (excluding Civilian Defence Employees) are eligible to subscribe under SCSS regardless of the above age limits
  2. No NRIs / HUF are eligible for making investments in SCSS

How to Open Senior Citizen Savings Scheme Account?

  • This account can be opened by any depositor at any deposit office. This scheme being an investment product of Indian government is one of the safest investment options.
  • An application needs to be filled up in Form A along with the deposit amount in multiples of one thousand rupees and age proof.
  • The subscriber to the scheme is allowed only one deposit in the account every year and cannot make multiple deposits in the same account. But on can open any number of accounts so that the total balance in all the accounts cannot exceed Rs 15 lakh.
  • The account may be opened in an individual capacity or jointly with the spouse. In the case of a joint account, the age of the first applicant is only considered for eligibility criteria, and there is no restriction on the age of the second applicant. The entire deposit is counted on account of the first holder. The second holder will also be eligible for another limit of Rs 15 lakh subject to the age limit. So you and your spouse together can deposit/invest up to Rs 30 lakh in the SCSS.
  • In case deposit amount is less than INR 1,00,000, the same can be deposited in cash. In rest of the cases, it has to be compulsorily by a cheque or demand draft or online transfer only.
  • The deposited amount cannot be withdrawn during the first year of investment. An account holder can withdraw amount only after completion of one year of account opening date, but that withdrawal is also with some penalty as under:
    1. Up to 1 year – Not allowed
    2. From 1 year – Up to 2 years – @1.5% of the Balance Deposit Amount will be deducted
    3. On or After expiry of 2 years – @1% of the Balance Deposit Amount will be deducted
  • The Ministry of Finance decides and revises the rate of interest on SCSS from time to time. The interest rate on SCSS investments for the fourth quarter of the financial year 2017-18 i.e. January 2018 to March 2018 is 8.3% per annum, TDS is applicable here. TDS is deducted at source on interest in case the amount of interest exceeds INR 10,000 per annum.
  • Compounding on interest is not applicable here, and interest is paid on a quarterly basis to provide a fixed and regular income to the senior citizen. This rate implies simple interest on the investment on an annual basis. Account holders have an option to avail interest on a quarterly basis. Interest payment dates are usually 30th June, 30th September, 31st December and next calendar year’s 31st March.

Application for Senior Citizen Savings Scheme

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.

Documents Required for SCSS

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:

  • Passport
  • Birth Certificate (issued by issued by MC/Gram Panchayat/District office of registrar of births and death)
  • Voter’s ID
  • Senior Citizen Card
  • PAN Card
  • Driving License
  • Certificate from employer for those who are above 55 but under 60 years of age and have taken VRS

Benefits of investing in the Senior Citizen Savings Scheme

  • This being an Indian government sponsored investment scheme, it is considered as the safest and reliable investment option.
  • The process to open an account is simple and can be opened at any authorised banks and any post offices across India. They are also transferable across India.
  • Documentation requirements are minimum here. Only KYC details and age proof need to be submitted.
  • It is permitted to operate multiple SCSS accounts by a single individual, either individually or jointly (with a spouse)
  • Nomination facility is also available at the time of opening an SCCS account by submitting an application on Form C accompanied by the passbook to the Branch.
  • The nomination made by the depositor can be cancelled or modified.
  • Tax deduction up to Rs 1.5 lakh can be claimed under Section 80C of Indian Tax Act 1961.
  • Tenure of this investment scheme is flexible. It has an average tenure of 5 years but can be extended up to 3 more years.
  • It is also possible to withdraw funds at the end of one year of account opening, subject to nominal penalty.

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.

Tax Benefits of Investing in SCSS

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.

Maturity and Withdrawal of Invested Amount

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.

  • The deposited amount at the end of maturity period can be withdrawn by submitting a written application, Form E.
  • In case, the amount is not withdrawn at the end of maturity period, the same shall be treated as normal savings account, and it can be withdrawn at any time by the depositor.
  • In the case of death of the depositor before maturity, the account shall be closed and deposit refunded on the application in Form F along with interest to the nominee or legal heirs.
  • If amount is up to INR 1,00,000, it may be paid to the legal heirs on production of
    1. letter of indemnity
    2. an affidavit
    3. a letter of disclaimer in the affidavit
    4. a certificate of death of the depositor on stamped paper in the form as in Annexure to Form F
List of Authorised Banks for Senior Citizen Savings Scheme
Allahabad BankIDBI BankSyndicate Bank
Andhra BankIndian BankUCO Bank
Bank of MaharashtraIndian Overseas BankUnion Bank of India
Bank of BarodaICICI BankUnited Bank of India
Bank of IndiaState Bank of IndiaVijaya Bank
Corporation BankState Bank of Mysore
Canara BankState Bank of Bikaner and Jaipur
Central Bank of IndiaState Bank of Patiala
Dena BankState Bank of Travancore
Punjab National BankState 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.

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Chetan Chandak (B.Com, LLB)
Chetan is the Head of Tax Research at H&R Block (India) with an experience of more than a decade in tax advising. He is also a regular contributor for some of the leading news publications in India such as Economic Times, Financial Express and Money Control. Professionally, Chetan is fascinated by international taxation and expat-related tax research.

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