…so interest income in the Senior Savings Plan can be entirely tax-free

New Delhi. The Central Government has recently set the interest rates for the Small Savings Plans, that is, the small savings plans for the April-June quarter. The interest rates of all these plans, including the Public Provident Fund (PPF) and the National Savings Plan (NSC), have been reduced between 0.70% and 1.40%. But in the midst of all this, an investigative report published by SBI has suggested that the government make interest income on the Senior Savings Scheme (SCSS) completely tax-free. According to the research report, lowering interest rates will have a big impact on seniors’ savings by reducing their regular income.

That is why there should be relaxation in the Savings Plan for the Elderly

(ME) It has been said in the SBI report that the reduction in the rate of small savings plans has a great impact on the elderly. According to the estimates provided in the SBI Ecowrap report, there are around Rs 4.1 crore in time deposit accounts for seniors in India with a total deposit of Rs 14 lakhs.

We tell you that the government has reduced the interest of the SCSS scheme from 8.6 percent to 7.4 percent. This is why it is imperative that the government exempt interest income from tax, especially for the Senior Citizens Savings Scheme (SCSS).

(II) Interest deduction for small savings plans was mandatory. Since there is a 10-year government guarantee with small savings schemes, the rate cut will reduce the difference between small savings and bank rates. The report said that even today, interest rates on small savings plans are better than bank deposits.

(III) The number of Time Deposits for Senior Citizens in the country is 4.1 crore with a total deposit of Rs 14 lakh crore. At the same time, the size of deposits per account is around Rs 3.3 lakh and the interest income on such deposits constituted 5.5 per cent of the final personal expenditure in FY2019. Let us tell you that under the SCSS scheme, up to Rs 15 lakh can be deposited in the senior account.

Peculiarities of the Savings Plan for the Elderly

(1) The maximum deposit amount in SCSS can be the retirement amount or Rs 15 lakh. Any amount that is less than these two can be invested in SCSS.

(two) If you are 60 years old and have retired from work, you can invest in this plan. A single or joint account can be opened under SCSS. The investment can be made under SCSS at the post office or any bank. According to SCSS, up to Rs 15 lakhs can be invested by opening a joint or individual account.

(3) The amount invested in SCSS must not exceed the amount received at retirement. If you are investing up to Rs 1 lakh to open an account at SCSS, you can give it in cash. If this amount is more than Rs 1 lakh, you need to deposit it in the form of a check.

(4) The Ministry of Finance of the Central Government reviews the interest rate of the SCSS every three months. The calculation of interest in SCSS is done quarterly. Accordingly, the interest amount is deposited into your account on March 31, June 30, September 30 and December 31. Currently, interest is received at a rate of 7.4 percent.

(5) The SCSS mandate is 5 years and can be extended for another three years. If you withdraw money from the SCSS account early, you may have to pay some fees for this.

(6) According to SCSS 2019, after the expiration of the account, it can be extended for 3 years. At SCSS, you will earn the same interest rate that was available at the time the account matured.undefined

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Tags: business news in hindi, PPF accounts, Small Savings Plans