In case the investor shifts to a different place, they will simply get the SCSS transferred to the financial institution/submit workplace department closest to them. (Representative picture)
SCSS: Tax Deducted at Source shall be lower from the curiosity accrued in a SCSS account if the entire curiosity exceeds Rs 50,000 in a monetary yr.
Senior Citizen Savings Scheme (SCSS) supplies a government-backed mode of funding to aged folks. Any particular person over the age of 60 can put money into the scheme. The five-year plan earns 8.2 p.c curiosity every year. While SCSS supplies a safe funding with a hard and fast charge of funding, there are some disadvantages of the scheme as nicely. Investors should maintain the professionals and cons of the scheme in thoughts earlier than placing their (*5*)cash within the SCSS. Here are the benefits and drawbacks of this scheme.
Advantages:
Tax advantages:
Investors can acquire tax advantages underneath part 80C of Income Tax Act. Investors can stand up to Rs 1.5 lakh deduction u/s 80C.
Safe to speculate:
Since the SCSS is backed by the federal government, it’s protected to put money into. There is much less likelihood of default or loss within the SCSS. People can deposit as much as Rs 30 lakh within the SCSS.
Premature withdrawals allowed:
Investors can withdraw their cash after one yr from the opening of the account. If any particular person makes the choice to shut the account inside one yr of opening it, no curiosity shall be given and the principal quantity shall be returned.
Accounts could be transferred throughout the nation:
In case the investor shifts to a different place, they will simply get the SCSS transferred to the financial institution/submit workplace department closest to them.
Disadvantages:
No curiosity on unclaimed curiosity earnings:
The Senior Citizen Savings Scheme pays curiosity each quarter. If the curiosity just isn’t claimed by the account holder, no further cash shall be earned on it.
TDS on SCSS:
Tax Deducted at Source (TDS) shall be lower from the curiosity accrued in a SCSS account if the entire curiosity exceeds Rs 50,000 in a monetary yr.
Fixed rate of interest:
The rate of interest underneath the scheme is fastened, that means that people who opened the account earlier, could also be at a drawback. They can open a brand new account to avail a greater charge of curiosity, however some expenses will apply.
Age restrict
Only people over the age of 60 can avail the advantages. Defence staff between 50 and 60 years or civilian staff from 55 to 60 years can put money into the scheme, offered they’ve opted for Voluntary Retirement Scheme (VRS) or superannuation. People of their 30s and 40s, who want to reap the benefits of the scheme, can not avail its advantages.
All in all, the SCSS is an advantageous scheme for senior residents, offered they continue to be conscious of what tax advantages are relevant and what aren’t.
