As name itself suggests, this scheme is only for the senior
citizens. The account may be opened by an individual, who has attained age of
60 years or above on the date of opening of the account. The account may
also be opened by those who has attained the age 55 years or more but less than
60 years and has retired under a Voluntary Retirement Scheme or a Special
Voluntary Retirement Scheme on the date of opening of the account or
within three months from the date of retirement. 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.
The account may be opened in individual capacity or jointly
with spouse. Non-resident Indians (NRIs) and Hindu Undivided Family (HUF) are
not eligible to open an account.
1. What are the salient
features of the Senior Citizens Savings Scheme, 2004?
The salient
features of the Senior Citizens Savings Scheme, 2004 are given below.
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.
|
2. Can a joint account be opened
under the scheme with any person?
Joint
account under the SCSS, 2004 can be opened only with the spouse. [Rule 3 (3)]
3. What should be the age of the
spouse in case of a joint account?
In case of a
joint account, the age of the first applicant / depositor is the only factor to
decide the eligibility to invest under the scheme. There is no age bar/limit
for the second applicant / joint holder (i.e. spouse). [Rule 3 (3)]
4. What will be the share of the
joint account holder in the deposit in an account?
The whole
amount of investment in an account under the scheme is attributed to the first
applicant / depositor only. As such, the question of any share of the second
applicant / joint account holder (i.e. spouse) in the deposit account does not
arise. [Rule 3 (3)]
5. Whether both the spouses can
open separate accounts in their individual capacity with separate limit of
Rs.15 lakh for each of them?
Both the
spouses can open individual and / or joint accounts with each other with the
maximum deposits up to Rs.15 lakh each, provided both are individually eligible
to invest under relevant provisions of the Rules governing the Scheme. (Rules 3
and 4 )
6. Whether any income tax rebate /
exemption is admissible?
No income
tax / wealth tax rebate is admissible under the Scheme. The prevailing Income
Tax provisions shall apply. (GOI letter F. No.2/8/2004/NS-II dated October 13,
2004)
7. Is TDS
applicable to the scheme?
Yes, TDS is
applicable to the Scheme as interest payments have not been exempted from
deduction of tax at source. (GOI letter F. No.2/8/2004/NS-II dated March 28,
2006)
8. Whether
any minimum limit has been prescribed for deduction of tax at source?
Tax is to be
deducted at source as per the minimum limit prescribed by the Government.
9. What is
the rate at which TDS is to be deducted from the account holder?
The rate for
TDS for a financial year is specified in Part II of Schedule I of the Finance
Act for that year. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
10. Whether
TDS should also be recovered from the undrawn interest payable to the legal
heirs of the deceased depositors?
Tax shall be
deducted at source even from any interest paid / payable to the legal heir of
the account holder. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
11. Whether TDS on interest payments
will be applicable with retrospective effect or prospective basis?
TDS is
applicable from the very first day when SCSS, 2004 was made operational
regardless of the fact that the Central Government or Reserve Bank of India or
any authority might have issued any Notification / circular / clarification at
a later stage. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
12. Whether only one person or
number of persons can be nominated in the accounts opened under the Scheme?
The
depositor may, at the time of opening of the account, nominate a person or
persons who, in the event of death of the depositor, will be entitled to
payment due on the account. [Rule 6 (1)]
13. Can a nomination be made after
the account has already been opened?
Yes,
nomination may be made by the depositor at any time after opening of the
account but before its closure, by an application in Form C accompanied by the
Pass book to the deposit office. [Rule 6 (2)]
14. Can a nomination be cancelled or
changed?
Yes, the
nomination made by the depositor may be cancelled or varied by submitting a
fresh nomination in Form C to the deposit office where the account is being
maintained. [Rule 6 (3)]
15. Can nomination be made in joint
account also?
Nomination
can be made in joint account also. In such a case, the joint holder will be the
first person entitled to receive the amount payable in the event of death of
the depositor. The nominee’s claim will arise only after the death of both the
joint holders. [Rule 6 (4)]
16. Can a
person holding a Power of Attorney sign for the nominee in the nomination form
?
No, a person
holding a Power of Attorney cannot sign for the nominee in the nomination form.
(GOI letter No. F.15/8/2005/NS-II dated March 02, 2006)
17. In case
of a joint account, if the first holder / depositor expires before maturity,
can the account be continued?
In case of a
joint account, if the first holder / depositor expires before the maturity of
the account, the spouse may continue the account on the same terms and
conditions as specified under the SCSS Rules. However, if the second holder
i.e. spouse has his / her own individual account, the aggregate of his/her
individual account and the deposit amount in the joint account of the deceased
spouse should not be more than the prescribed maximum limit. In case the
maximum limit is breached, then the remaining amount shall be refunded, so that
the aggregate of the individual account and deceased spouse’s joint account is
maintained at the maximum limit. [Rules 6 (4) and 8 (3)]
18. What
happens to the accounts if both the spouses are maintaining individual accounts
and not any joint account and one of them expires?
If both the
spouses have opened separate accounts under the scheme and either of the
spouses dies during the currency of the account(s), the account(s) standing in
the name of the deceased depositor/spouse shall not be continued and such
account(s) shall be closed. The account can be closed by making an application
in Form ‘F’. Annexures II & III to Form ‘F’ can be attested by the Oath
Commissioner or Notary Public [Rule 8].
19. Whether any fee has been
prescribed for nomination and / or change / cancellation of nomination?
No fee has
been prescribed for nomination and / or change / cancellation of nomination(s)
in the accounts under the SCSS, 2004. (GOI letter F. No.2/8/2004/NS-II dated
October 13, 2004)
20. What is
the age limit in the case of retired Defence Personnel for investment in the
scheme?
The retired
personnel of Defence Services (excluding Civilian Defence Employees) will be
eligible to subscribe under the scheme irrespective of the age limit of 60
years subject to the fulfillment of other specified conditions. (The Senior
Citizens Savings Scheme (Amendment) Rules, 2004 notified on October 27, 2004)
21. What is the meaning of
‘retirement benefits’ for the purpose of SCSS, 2004?
“Retirement
benefits” for the purpose of SCSS Rules have been defined as ‘any payment due
to the depositor on account of retirement whether on superannuation or
otherwise and includes Provident Fund dues, retirement / superannuation
gratuity, commuted value of pension, cash equivalent of leave, savings element
of Group Savings linked Insurance scheme payable by employer to the employee on
retirement, retirement-cum-withdrawal benefit under the Employees’ Family
Pension Scheme and ex-gratia payments under a voluntary retirement scheme’.
(Rule 2 (a) of the Senior Citizens Savings Scheme (Amendment) Rules, 2004
notified on October 27, 2004)
22. Can
deposits under the SCSS scheme be made only from amounts received as
retirements benefits?
In case an
investor has attained the age of 60 years and above, the source of amount being
invested is immaterial [Rule 2 (d)(i)]. However, if the investor is 55 years or
above but below 60 years and has retired under a voluntary scheme or a special
voluntary scheme or has retired from the Defence services, only the retirement
benefits can be invested in the SCSS. [Rule 2(d) (ii)].
23. Is there
a period prescribed for opening deposit account under the SCSS scheme, by the
senior citizen, from the retirement benefits?
If the
investor is 60 years and above, there is no time period prescribed for opening
the SCSS account(s). However for those below 60 years, following time limits
have been prescribed.
(a) the
persons who have attained the age of 55 years or more but less than 60 years
and who retired under a voluntary retirement scheme or a special voluntary
retirement scheme on the date of opening of an account under these rules,
subject to the condition that the account is opened by such individual within
three months of the date of retirement.
(b) the
persons who have retired at any time before the commencement of these rules and
attained the age of 55 years or more on the date of opening of an account under
these rules, will also be eligible to subscribe under the scheme within a
period of one month of the date of the notification of the SCSS, 2004 i.e. 27th
October 2004, subject to fulfillment of other conditions. [Rule 2 of the
Senior Citizens Savings Scheme (Amendment) Rules, 2004]
(c) the
retired personnel of Defence Services (excluding Civilian Defence Employees)
will be eligible to subscribe under the scheme irrespective of the above age
limits subject to the fulfillment of other specified conditions. [Rule 2 of
the Senior Citizens Savings Scheme (Amendment ) Rules, 2004]
24. Can an
account holder obtain loan by pledging the deposit / account under the SCSS,
2004?
The facility
of pledging the deposit / account under the SCSS, 2004 for obtaining loans, is
not permitted since the account holder will not be able to withdraw the
interest amount periodically, defeating the very purpose of the scheme. (GOI
letter F. No.2/8/2004/NS-II dated May 31, 2005)
25. Is premature withdrawal of the
deposits from the accounts under the SCSS, 2004 permitted?
Premature
withdrawal / closure of the deposits from the accounts under the SCSS, 2004 has
been permitted after completion of one year from the date of opening of the
account after deducting the penalty amount as given below.
(i) If the
account is closed after one year but before expiry of two years from the date
of opening of the account, an amount equal to one and half per cent of the
deposit shall be deducted.
(ii) If the
account is closed on or after the expiry of two years from the date of opening
of the account, an amount equal to one per cent of the deposit shall be
deducted.
However, if
the depositor is availing the facility of extension of account under Rule 4
(3), then he/she can withdraw the deposit and close the account at any time
after the expiry of one year from the date of extension of the account without
any deduction. [Rule 9 (1) (a) (b) and (2)]
26. Are
Non-resident Indians, Persons of Indian Origin and Hindu Undivided Family
eligible to invest in the SCSS, 2004?
Non resident
Indians (NRIs), Persons of Indian Origin (PIO) and Hindu Undivided Family (HUF)
are not eligible to invest in the accounts under the SCSS, 2004. If a depositor
becomes a Non-resident Indian subsequent to his/her 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
will be marked as a Non-Resident account. [Rule 13 and GOI letter
F.No.2/8/2004/NS-II dated June 19, 2006)
27. Can an account be transferred
from one deposit office to another?
A depositor
may apply in Form G, enclosing the Pass Book thereto, for transfer of his
account from one deposit office to another. If the deposit amount is rupees one
lakh or above, a transfer fee of rupees five per lakh of deposit for the first
transfer and rupees ten per lakh of deposit for the second and subsequent transfers
shall be payable. [Rule 11 and GOI Notification GSR.(E) dated March 23, 2006)
28. Can an SCSS account be extended?
A depositor
may extend the account for a further period of three years by making an
application to the deposit office within a period of one year after maturity.
29. Does an
account, which is not extended on maturity, earn any interest?
In case a
depositor does not close the account on maturity and also does not extend the
account, the account will be treated as matured and the depositor will be
entitled to close the account at any time subject to the condition that the
post maturity interest at the rate as applicable to the deposits under the Post
office Savings Accounts from time to time will be payable on such matured
deposits upto the end of the month preceding the month of the closure of the
account.
30. What happens if an account is
opened in contravention of the SCSS Rules?
If an
account has been opened in contravention of the SCSS Rules, the account shall
be closed immediately and the deposit in the account, after deduction of the
interest, if any, paid on such deposit, shall be refunded to the depositor.
(Rule 12)
31. Whether
commission is payable to the agents under the Scheme?
Payment of
commission on the Scheme has been discontinued w.e.f. December 1, 2011
(Government of India Notification dated November 25, 2011).
32. Which
are the banks authorized to open an account under the SCSS, 2004?
At present,
24 Nationalized banks and one private sector bank, as per list below, are
authorized to handle the SCSS, 2004. It may be noted that only designated
branches of these banks have been authorized to handle SCSS, 2004.
- State Bank of India
- State Bank of Hyderabad
- State Bank of Bikaner and Jaipur
- State Bank of Patiala
- State Bank of Mysore
- State Bank of Travancore
- Allahabad Bank
- Andhra bank
- Bank of Baroda
- Bank of India
- Bank of Maharashtra
- Canara Bank
- Central Bank of India
- Corporation Bank
- Dena Bank
- Indian Bank
- Indian Overseas Bank
- Punjab National Bank
- Syndicate Bank
- UCO Bank
- Union Bank of India
- United Bank of India
- Vijaya Bank
- IDBI Bank
- ICICI Bank Ltd.
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