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Finance: Information about Senior Citizen’s Scheme, 2004




As the time for income tax comes close, investment into the right instruments is critical. As events of the past one year have shown, investment into the stock markets have a factor of risk that needs to be factored in. This is even more important for senior citizens who are more averse to this risk, given that capital protection remains an important goal for them. Towards this end, one major investment instrument for Senior Citizens is the Senior Citizens Saving Scheme 2004. Some of the salient features of this scheme are:

The scheme is available for citizens above 60 years of age; however a provision has been put in place for individuals who have crossed 55 years of age. Such individuals may invest subject to the conditions that,
* The person has retired under a voluntary retirement scheme or a special voluntary retirement scheme on the date of making the investment,
* The investment is made within three months of the date of retirement,


* And a certificate from the employer, indicating the fact of retirement, retirement benefits, along with period of such employment with the employer, is attached with the application form.
* Non-Resident Indians and Hindu Undivided Families are not permitted to invest in the scheme. If a depositor becomes a Non-resident Indian subsequent to his 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 shall be marked as a Non-Resident account [Rule 13 and GOI letter F.No.2/8/2004/NS-II dated June 19, 2006)
* Senior Citizens Savings Scheme (SCSS) is a Government of India Product.
* 9% interest offered to depositors.
* Since the product is offered by Govt of India, this product is one of the most Safest Investment Option.
* Premature closure of account is possible after one year from the date of opening the account.
* Mode of holding: The depositor can hold an account either individually or jointly with his/ her spouse
* Maturity: The scheme has a tenure of 5 years. The account can be extended for a 3 year period by making an application.
* Tax benefits: The interest income from the scheme is fully taxable.
* Senior Citizens Saving Scheme 2004 and the Post Office Term Deposit Account have been added to the basket of saving instruments under Section 80(C) of the Income Tax Act.

A lot more questions are answered in the FAQ available on the RBI page (link)




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