If you are a senior citizen, there are several advantages when you reach this stage in life, primarily a higher interest rate on fixed deposits and some other investments. However, even after retirement, senior citizens still have to pay taxes each year. This is why it is necessary to find out the best tax-saving instruments to minimise the tax outgo once you retire.
Q. Can a joint account be opened with any person?
The account can be opened jointly with spouse only.
Q. What should be the age of spouse in case of a joint account?
In case of a joint account, age of 1st applicant / depositor is the only factor to decide the eligibility to invest under the scheme. There is no age bar/limit for the 2nd applicant / joint holder.
Q. Attribution 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 1st applicant / Depositor only. Question of any share of the 2nd applicant / joint account holder (Spouse), therefore, does not arise.
In case the depositor does not close the account on maturity and also not extend the account for a period of three years within a period of one year after maturity, how, the interest is to be calculated / paid after the maturity period?
The account shall be treated as matured and post maturity interest at the rate applicable to the deposits under Post Office Savings Accounts from time to time, shall only be admissible for the period beyond maturity in accordance with the rules. The amount of excess interest paid (at higher rate applicable to the deposits under SCSS) after maturity shall be deducted.
Q.Whether any Income Tax rebate / exemption is admissible?
No Income / Wealth Tax rebate and/or exemption is admissible under the scheme. The existing Income Tax provisions shall apply.
Q. Whether 'A' can open a joint account with his/her Spouse 'B' with maximum admissible deposits of Rs.15 lakhs and similarly 'B' can open another account individually or jointly with 'A', with any amount of deposit.
Yes. Both the Spouses can open individual and/or joint accounts with each other with the maximum deposits upto Rs.15 Lakh each, provided both are individually eligible to invest under relevant provisions of the rules governing the scheme.
Q. IS 80C applicable on senior citizen savings schemes?
Yes, investments made in SCSS are eligible for income tax deduction benefits under the Section 80C of Income Tax Act.
Q. Whether new savings account is required to be opened for getting the interest credited periodically?
No such requirement is specified. The Depositors may get their interest, due on the deposits under the scheme, credited to their existing saving account (s), at the deposit office where their account may be single or joint, subject to the condition that the maximum limit of balance specified, if any, in the savings account, is not crossed by credit of the interest.
Q. Multiple withdrawals, as per requirements of the depositor, may be permitted.
No. There is, however, no bar on the depositors for opening of new/multiple accounts within the overall ceiling of Rs.15 lakh.
Q. Whether any fee is to be charged for nomination and/or change/cancellation of nomination?
No such fee has been specified.
Q. 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.
Q. Can deposits under the SCSS scheme be made only from amounts received as retirement’s benefits?
In case an investor has attained the age of 60 years and above, the source of amount being invested is immaterial .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.
Q. 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.
Q. 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.
Q. 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.
Q. In case the depositor does not close the account on maturity and also not extend the account for a period of three years within a period of one year after maturity, how, the interest is to be calculated / paid after the maturity period?
The account shall be treated as matured and post maturity interest at the rate applicable to the deposits under Post Office Savings Accounts from time to time, shall only be admissible for the period beyond maturity in accordance with the rules. The amount of excess interest paid (at higher rate applicable to the deposits under SCSS) after maturity shall be deducted.
