Senior Citizens Savings Scheme: Eligibility, Feature, Interest Rates And Taxability
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The investment itself is tax-deductible under Section 80C, but the interest earned is completely taxable.
The Senior Citizen Savings Scheme (SCSS) is government-backed in India, introduced in 2004 to provide financial security to senior citizens who require a consistent income following retirement. It offers a fixed interest rate of 8.2 per cent (as of June 12, 2025), payable quarterly to all individuals aged 60 and above. They can invest up to Rs 30 lakhs during a 5-year period that can be extended for an additional three years. The investment itself is tax-deductible under Section 80C, but the interest earned is completely taxable.
Let's take a closer look at its Eligibility Criteria, Features, Interest Rate, Taxability and more.
Eligibility:
The individual should have to be above 60 years of age to open a SCSS account in a Post office or a bank.
Retired civilians aged 55 and up, but under 60. However, the investment should be made within one month of receiving the retirement benefits.
Retired defence employees above 50 years and below 60 years. The investment criteria remain the same as the retired civilians.
Accounts can be opened as individuals or jointly with a spouse. The total amount deposited in the joint account will be attributed only to the first account holder.
Notably, Non-Resident Indians (NRI) or Hindu Undivided Families (HUF) are not eligible to open an account.
The individual must submit their PAN Card and Aadhaar Card numbers.
All the eligible individuals can invest in SCSS with a minimum of Rs 1,000 and a maximum of Rs 30 lakh.
The SCSS interest rate is fixed at 8.2 per cent annually. The rate is updated quarterly and the final rate is determined by factors such as inflation, market conditions and others.
The savings scheme lasts five years. You can choose to extend the term for another three years. You must submit a request to the bank within one year of maturity. You can only select to extend the tenure once.
After one year of account opening, you may withdraw funds prematurely from your SCSS account.
If you open a SCSS scheme, you will be able to receive quarterly disbursals. Banks make interest payments on April 1, July 1, October 1 and January 1.
Taxability:
It provides both tax benefits and is liable to taxation. Investments in SCSS are eligible for deductions under Section 80C of the Income Tax Act, up to Rs 1.5 lakhs per year. The interest is taxable based on an individual's tax slab and TDS (Tax Deducted at Source) applies if the interest exceeds Rs 50,000 per year. Also, senior citizens can claim a maximum of Rs 50,000 annual deduction on interest earned under Section 80TTB of the Income Tax Act.
Note: An SCSS account can be transferred from a post office to a bank and vice versa. Furthermore, it is transferable throughout India.
First Published:
June 12, 2025, 15:12 IST
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