Frequently Asked Questions about Senior Citizens Savings Scheme (SCSS)
1. What will be the share of the joint account holder in the deposit in an account?
The whole amount is attributed to the first depositor or applicant. The addition of a spouse as a joint account does not matter in this case.
2. Can both the spouses open separate accounts?
Yes, individual accounts can be opened as well, provided the deposit limit is a maximum of Rs.15 lakh. Of course, it has to adhere to the rules of the scheme.
3. Any income tax rebate / exemption is admissible?
No, not with this scheme.
4. Is TDS applicable to the scheme?
Yes if the interest exceeds Rs.10,000 per annum, TDS is applicable. In this scheme, interest payments are no exemption to deduction of tax at source.
5. Any minimum limit has been prescribed for deduction of tax at source?
As per government regulations, tax has to be deducted at source as per the minimum balance.
6. 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 in place for the nominee in the nomination form.
7. In case of a joint account, if the first holder / depositor expires before maturity, can the account be continued?
Yes, the nominee can hold the account of the expired depositor in case of a death, provided it pertains to the SCSS Rules.
8. Is there any fee prescribed for nomination and / or change / cancellation of nomination?
No fee is charged.
9. Can an account holder obtain loan by pledging the deposit / account under the SCSS, 2004?
Periodic withdrawals for loans is not possible in this scheme as it defies the very nature of the scheme.
10 Is premature withdrawal of the deposits from the accounts under the SCSS, 2004 permitted?
Yes, premature withdrawals are allowed, although a premature closure of the savings account is permitted only after a year, whereby the account holder will be charged 1.5% of the savings and 1% after two years.
11.Are Non-resident Indians, Persons of Indian Origin and Hindu Undivided Family eligible to invest in the SCSS, 2004?
No, it is not possible, though an Indian moving abroad and having a SCSS can continue to maintain it.
12. Can an account be transferred from one deposit office to another?
Using Form G, an account can be transferred from one deposit office to another.
13. Can an SCSS account be extended?
Yes, within one year after maturity a depositor can extend their SCSS for a period of three years.
14. What happens if an account is opened in contravention of the SCSS Rules?
The account will be close, interest deducted and the deposit money returned to the depositor.
15. Whether commission is payable to the agents under the Scheme?
Payments of commission under this scheme has been discontinued.
16. Why must I choose to open my SCSS account in a bank rather than a post office? Which is better?
The senior citizens savings scheme is an Indian government sponsored program that is administered to the general public through two mediums- a list of certified banks and the offices belonging to the Indian Postal Department. The latter are just the medium and do not possess any control over the terms, rules and regulation of the actual SCSS product. Thus, it will be wrong to put one medium over the next.
However, comparatively both bank and post offices have same features in recent past. One of the best feature in Post Office - easy accessibility and auto credit to Savings Bank Account in Post Office and Transfer the amount bank from Post Office Account through IPPB. So many technological implementation processed in Post Office too.
17. What documents must be submitted when opening up a senior citizens savings scheme account?
Essentially, the documents that help the bank ascertain your age are required when opening up the SCSS account. These include, Passport/ Birth Certificate/ Voter’s ID/ Senior Citizen Card/ PAN, etc.
18. What will happen to my account if I were to pass away?
If you have opened an individual account (without any joint investor) and unfortunately, you were to pass away unexpectedly, the SCSS account will be primed up for closure. To affect such a termination, the account holder’s nominee must forward an application in Form ‘F’. The Annexures II & III of such a form must be attested by a public notary or the Oath Commissioner.
19.I keep hearing the term ‘retirement benefits’, what does this mean exactly?
When speaking of the eligibility for the senior citizens savings scheme, people belonging to the age group of 55 years- 60 years can apply, provided that they must open this account within one month of receipt of ‘retirement benefits’. Also, the invested amount must not exceed the net value of the ‘retirement benefits’.
What then is ‘retirement benefits’? In the context of the rules governing the SCSS accounts, retirement benefits are defined as any payment that is credited to the depositor post his/her retirement (on superannuation or otherwise) and includes such monetary components as PF dues, gratuity, encashment of unused leaves, earnings from Group Savings linked Insurance scheme, payments per the voluntary retirement scheme, etc. When applying for a SCSS account, the applicant must disclose such benefits in line with the regulations that govern the operation of such SCSS accounts.
Can I cancel or change my nomination?
When applying for the SCSS account, you are free to propose a nominee. This activity can also be completed after your account has been in existence for a specified duration of time. Alternatively, the nomination made by you can easily be canceled or edited by submitting a fresh nomination in Form-C to the bank/post office wherein said SCSS account is being maintained.
20.My wife is just 45 years old, can I appoint her as partner in a joint account?
Since you already have an SCSS account, you are free to appoint your spouse as the joint account holder. Its your age that is the qualifying factor here and not your wife’s. Thus, her age doesn’t affect her eligibility to act as your joint partner in the account. However, the converse of this isn’t possible as your wife is just 45 years old and the minimum age to be eligible to own a SCSS account is 60 years.
21. What to keep in mind before opening a SCSS Account
Before you open a Senior Citizens Savings Scheme account, ensure that you provide all the necessary information that has been requested. If it is found that the information provided by you is incorrect or false, the account shall be closed with immediate effect. The deposited amount will be refunded to the depositor after the deduction of interest that has already been paid into the account.
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