SCSS is a tax saving scheme offered by the post office and back by the Government. By using a SCSS calculator one can calculate the value of their SCSS investment and the interest earned on it at the end of the investment tenure.
Who should invest in an SCSS investment scheme?
SCSS scheme is for senior citizens who are retired. Since this scheme is qualified for tax exemption, investors looking for tax saving investment options can invest in this scheme. This senior citizen scheme is government-backed. Hence the returns are guaranteed. Investors looking for fixed, regular income from their investments can invest in this scheme. However, to invest in this scheme, one has to meet the eligibility criteria.
Only resident Indians can invest in the scheme
Individuals age has to be 60 and above
Individuals who have taken voluntary retirement at the age 55-60 can invest in this senior citizen scheme. However, they should’ve retired according to superannuation and VRS rules. Also, they should open the account within one month from the receipt of retirement benefits.
Defence personnel, who are retired, can open senior citizens’ savings scheme accounts after meeting a few criteria.
NRI’s, PIOs, HUF members are not eligible to invest in Senior Citizens Savings Scheme.
How to invest in an SCSS scheme?
One can open a senior citizens saving scheme account in any post office. However, senior citizens can also invest in this scheme though some banks. To make the scheme more accessible to the citizens, the government has authorized a few banks to accept SCSS investments. The list of authorized banks are:
- Vijaya Bank
- Union Bank of India
- UCO Bank
- Syndicate Bank
- State Bank of India
- Punjab National Bank
- Indian Overseas Bank
- Indian Bank
- IDBI Bank
- ICICI Bank
- Dena Bank
- Canara Bank
- Central Bank of India
- Bank of India
- Bank of Baroda
- Corporation Bank
- Bank of Maharashtra
- Allahabad Bank
- Andhra bank
Features of an SCSS Scheme
Following are the features of the SCSS:
The interest rate for SCSS for FY 2022-23 Q1 (April 2022 – June 2022) is 7.4%. The Ministry of Finance reviews the SCSS interest rates every quarter, and the interest rate is subject to change periodically.
The scheme acts as a source of income for senior citizens. This is because the scheme guarantees income in the form of quarterly interest payments. The interest payments are done at the start of every quarter starting from April 1st.
The scheme’s lock-in period is five years. After five years, the scheme matures. However, investors can extend it to another three years.
Minimum and maximum investment
Investors can invest a minimum of INR 1000 and in multiples of 1000 thereof. The maximum investment one can do in an SCSS scheme is INR 15 lakhs.
One can close their SCSS account prematurely. The government, however, cuts a penalty for the same in the form of interest. The SCSS account can be closed after one year from opening it. The penalty for the same is 1.5%. If the account is closed after two years from opening, the penalty is 1%.
Investment in SCSS qualifies for tax saving under Section 80C of the Income Tax Act. However, the interest earned is taxable as per the individual income tax slab rate. Also, there is a TDS deducted on interest, if the interest is more than INR 50,000. The same can be claimed while filing tax returns.
Benefits of investing in an SCSS scheme
Secure: SCSS is one of the government-sponsored investment plans. Therefore, the scheme is among the most reliable and safest investments options available for senior citizens.
Easy process: Investing in SCSS is very easy. SCSS accounts can be opened easily by visiting the nearest post office or at an authorized bank. Additionally, the account is easily transferable across India.
Good returns: The current interest for SCSS scheme is 7.40%. The interest is higher when compared to a saving account or a fixed deposit. Therefore, SCSS offers good returns for its investors.
Tax benefits: Investments up to INR 1,50,000 in SCSS can be claimed for tax deduction under Section 80C of the Income Tax Act. However, there is a TDS deducted on interest, if the interest is more than INR 50,000. The same can be claimed while filing tax returns.
Flexible tenure: SCSS has a lock-in period of five years. However, the account holder has an option to extend the investment tenure by three years further.
Nomination: SCSS has a nomination facility. While opening the SCSS account, investors can submit the nominee details.
What is an SCSS scheme calculator?
SCSS calculator helps in calculating the maturity amount and interest amount. Senior Citizen Savings Scheme SCSS is among the most preferred investment schemes for senior citizens. The current interest rate offered on SCSS scheme is 7.40% p.a. Also, the investment tenure for the scheme in 5 years.
Following are the features of SCSS calculator:
Maturity Amount: Determines the maturity value based on the investment amount, investment tenure and rate of interest.
Total interest earned: Determines the total interest earned during the tenure of the investment.
Quarterly receivable interest: The SCSS calculator also determines the quarterly interest an account holder would earn during the investment tenure.
How to use Scripbox’s SCSS calculator?
Scripbox’s SCSS calculator is available online and is free to use. The SCSS calculator helps an investor to determine their potential returns from their SCSS investments. Investors can opt for quarterly interest payments. Therefore, the SCSS interest calculator also provides the quarterly interest amount for the ease of understanding the returns.
Below is a step by step process of how to use the SCSS calculator with an example.
Mr Ravi decides to invest in SCSS for his retirement. He wishes to invest INR 3,00,000 into the scheme. Inputting the investment amount into the SCSS interest calculator will help Mr Ravi determine his maturity value and interest earned.
Investment Amount = INR 3,00,000
Tenure = 5 years
Interest = 7.40%
The maturity amount is INR 4,11,000
Total interest earned is INR 1,11,000
Therefore, the maturity amount for Mr Ravi’s investment is INR 4,11,000. Additionally, suppose Mr Ravi wishes to opt for quarterly interest payments. In that case, the Scripbox’s SCSS calculator also determines the quarterly interest amount.
Quarterly receivable interest is INR 5,550.
Benefits of using an SCSS calculator
Following are the benefits of using SCSS calculator.
Easy to use
SCSS calculator is very simple and easy to use. All one has to do is enter the investment amount. The SCSS interest rates and tenure are already fixed. Hence one need not enter those figures in the calculator. The calculator returns the maturity amount, interest earned, and the quarterly interest earned.
The calculator saves time for an investor. The investor need not perform the calculations manually and waste time on the same. Instead, he/she can use the calculator to calculate the results for the desired investment amount quickly.
The calculator is very accurate. There is no chance of error for the inputs.
By using the calculator, one can plan their income and expenses accordingly. Since the calculator gives the maturity amount, total interest earned and the quarterly interest. They can calculate their monthly expenses and further investments accordingly.
By inputting multiple investment amounts, investors try out different scenarios to plan their future income.
Free to use
The SCSS calculator is available online and is free to use multiple times.
SCSS scheme can help senior citizens earn a regular income in their retirement life. One can invest their retirement benefits in this scheme. Before investing in the SCSS scheme, one has to check whether they are eligible to invest in it. Scripbox’s SCSS calculator helps in calculating the quarterly income one can earn from the scheme. It also gives the total maturity amount and the total interest earned from this investment.
Frequently Asked Questions
There are multiple tax saving options that qualify for tax deduction under Section 80 C of the Income Tax Act. Following are some of the popular schemes:
1. National Savings Scheme
2. Public Provident Fund
3. Employee Provident Fund
4. Equity Linked Savings Scheme (Tax saving mutual funds)
5. Sukanya Samriddhi Yojana
6. Tax saving fixed deposit
One can use an income tax calculator to calculate the amount on which the taxes can be saved. Additionally, Scripbox Income Tax Calculator gives suggestions on how to save more tax, if there is a scope for the same.
Following are the list of documents one requires to open a SCSS account:
1. Aadhar Card
2. PAN Card
4. Voter ID
5. Telephone Bill
6. Electricity Bill
7. Senior Citizen Card/ Birth Certificate
8. Two passport-sized photographs
9. Self-attested photocopies of the above documents have to be submitted at the account opening branch.