Q. What are the salient features of the Senior Citizens Savings Scheme, 2004?
A:The salient features of the Senior Citizens Savings Scheme, 2004 are given below.
Tenure of the deposit account:5 years, which can be extended by 3 years.
Rate of interest:8.6 per cent per annum
Frequency of computing interest:Quarterly
Taxability:Interest is fully taxable.
Whether TDS is applicable:Yes. Tax will be deducted at source.
Investment to be in multiples of:`1000/-
Maximum investment limit:` 15 lakh
Minimum eligible age for investment:60 years (55 years for those who have retired on superannuation or under a voluntary or special voluntary scheme). The retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to invest irrespective of the age limits subject to the fulfillment of other specified conditions
Premature closure/withdrawal facility:Permitted after one year of opening the account but with penalty.
Transferability:Not transferable
Tradability:Not tradable
Nomination facility:Nomination facility is available.
Modes of holding:Accounts can be held both in single and joint holding modes. Joint holding is allowed only with spouse.
Application forms available with Post Offices and designated branches of 24 Nationalised banks and one private sector bank
Applicability to NRI, PIO and HUFs Non Resident Indians (NRIs), Persons of Indian Origin (PIO) and Hindu Undivided Family (HUF) are not eligible to open an account under the Scheme.
Transfer from one deposit office to another
Transfer of account from one deposit office to another is permitted.
Q. Can a joint account be opened under the scheme with any person?
A:Joint account under the SCSS, 2004 can be opened only with the spouse.
Q. What should be the age of the spouse in case of a joint account?
A:In case of a joint account, the age of the first applicant / depositor is the only factor to decide the eligibility to invest under the scheme. There is no age bar/limit for the second applicant / joint holder (i.e. spouse).
Q. What will be the share of the joint account holder in the deposit in an account?
A:The whole amount of investment in an account under the scheme is attributed to the first applicant / depositor only. As such, the question of any share of the second applicant / joint account holder (i.e. spouse) in the deposit account does not arise.
Q. Whether both the spouses can open separate accounts in their individual capacity with separate limit of Rs.15 lakh for each of them?
A:Both the spouses can open individual and / or joint accounts with each other with the maximum deposits up to Rs.15 lakh each, provided both are individually eligible to invest under relevant provisions of the Rules governing the Scheme. (Rules 3 and 4 )
Q. Whether any income tax rebate / exemption is admissible?
A:No income tax / wealth tax rebate is admissible under the Scheme. The prevailing Income Tax provisions shall apply. (GOI letter F. No.2/8/2004/NS-II dated October 13, 2004)
Q. Is TDS applicable to the scheme?
A:Yes, TDS is applicable to the Scheme as interest payments have not been exempted from deduction of tax at source. (GOI letter F. No.2/8/2004/NS-II dated March 28, 2006)
Q. Whether any minimum limit has been prescribed for deduction of tax at source?
A:Tax is to be deducted at source as per the minimum limit prescribed by the Government.
Q. What is the rate at which TDS is to be deducted from the account holder?
A:The rate for TDS for a financial year is specified in Part II of Schedule I of the Finance Act for that year. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
Q. Whether TDS should also be recovered from the undrawn interest payable to the legal heirs of the deceased depositors?
A:Tax shall be deducted at source even from any interest paid / payable to the legal heir of the account holder. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
Q. Whether TDS on interest payments will be applicable with retrospective effect or prospective basis?
A:TDS is applicable from the very first day when SCSS, 2004 was made operational regardless of the fact that the Central Government or Reserve Bank of India or any authority might have issued any Notification / circular / clarification at a later stage. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
Q. Whether only one person or number of persons can be nominated in the accounts opened under the Scheme?
A:The depositor may, at the time of opening of the account, nominate a person or persons who, in the event of death of the depositor, will be entitled to payment due on the account.
Q. Can a nomination be made after the account has already been opened?
A:Yes, nomination may be made by the depositor at any time after opening of the account but before its closure, by an application in Form C accompanied by the Pass book to the deposit office.
Q. Can a nomination be cancelled or changed?
A:Yes, the nomination made by the depositor may be cancelled or varied by submitting a fresh nomination in Form C to the deposit office where the account is being maintained.
Q. Can nomination be made in joint account also?
A:Nomination can be made in joint account also. In such a case, the joint holder will be the first person entitled to receive the amount payable in the event of death of the depositor. The nominee’s claim will arise only after the death of both the joint holders.
A:The salient features of the Senior Citizens Savings Scheme, 2004 are given below.
Tenure of the deposit account:5 years, which can be extended by 3 years.
Rate of interest:8.6 per cent per annum
Frequency of computing interest:Quarterly
Taxability:Interest is fully taxable.
Whether TDS is applicable:Yes. Tax will be deducted at source.
Investment to be in multiples of:`1000/-
Maximum investment limit:` 15 lakh
Minimum eligible age for investment:60 years (55 years for those who have retired on superannuation or under a voluntary or special voluntary scheme). The retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to invest irrespective of the age limits subject to the fulfillment of other specified conditions
Premature closure/withdrawal facility:Permitted after one year of opening the account but with penalty.
Transferability:Not transferable
Tradability:Not tradable
Nomination facility:Nomination facility is available.
Modes of holding:Accounts can be held both in single and joint holding modes. Joint holding is allowed only with spouse.
Application forms available with Post Offices and designated branches of 24 Nationalised banks and one private sector bank
Applicability to NRI, PIO and HUFs Non Resident Indians (NRIs), Persons of Indian Origin (PIO) and Hindu Undivided Family (HUF) are not eligible to open an account under the Scheme.
Transfer from one deposit office to another
Transfer of account from one deposit office to another is permitted.
Q. Can a joint account be opened under the scheme with any person?
A:Joint account under the SCSS, 2004 can be opened only with the spouse.
Q. What should be the age of the spouse in case of a joint account?
A:In case of a joint account, the age of the first applicant / depositor is the only factor to decide the eligibility to invest under the scheme. There is no age bar/limit for the second applicant / joint holder (i.e. spouse).
Q. What will be the share of the joint account holder in the deposit in an account?
A:The whole amount of investment in an account under the scheme is attributed to the first applicant / depositor only. As such, the question of any share of the second applicant / joint account holder (i.e. spouse) in the deposit account does not arise.
Q. Whether both the spouses can open separate accounts in their individual capacity with separate limit of Rs.15 lakh for each of them?
A:Both the spouses can open individual and / or joint accounts with each other with the maximum deposits up to Rs.15 lakh each, provided both are individually eligible to invest under relevant provisions of the Rules governing the Scheme. (Rules 3 and 4 )
Q. Whether any income tax rebate / exemption is admissible?
A:No income tax / wealth tax rebate is admissible under the Scheme. The prevailing Income Tax provisions shall apply. (GOI letter F. No.2/8/2004/NS-II dated October 13, 2004)
Q. Is TDS applicable to the scheme?
A:Yes, TDS is applicable to the Scheme as interest payments have not been exempted from deduction of tax at source. (GOI letter F. No.2/8/2004/NS-II dated March 28, 2006)
Q. Whether any minimum limit has been prescribed for deduction of tax at source?
A:Tax is to be deducted at source as per the minimum limit prescribed by the Government.
Q. What is the rate at which TDS is to be deducted from the account holder?
A:The rate for TDS for a financial year is specified in Part II of Schedule I of the Finance Act for that year. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
Q. Whether TDS should also be recovered from the undrawn interest payable to the legal heirs of the deceased depositors?
A:Tax shall be deducted at source even from any interest paid / payable to the legal heir of the account holder. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
Q. Whether TDS on interest payments will be applicable with retrospective effect or prospective basis?
A:TDS is applicable from the very first day when SCSS, 2004 was made operational regardless of the fact that the Central Government or Reserve Bank of India or any authority might have issued any Notification / circular / clarification at a later stage. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
Q. Whether only one person or number of persons can be nominated in the accounts opened under the Scheme?
A:The depositor may, at the time of opening of the account, nominate a person or persons who, in the event of death of the depositor, will be entitled to payment due on the account.
Q. Can a nomination be made after the account has already been opened?
A:Yes, nomination may be made by the depositor at any time after opening of the account but before its closure, by an application in Form C accompanied by the Pass book to the deposit office.
Q. Can a nomination be cancelled or changed?
A:Yes, the nomination made by the depositor may be cancelled or varied by submitting a fresh nomination in Form C to the deposit office where the account is being maintained.
Q. Can nomination be made in joint account also?
A:Nomination can be made in joint account also. In such a case, the joint holder will be the first person entitled to receive the amount payable in the event of death of the depositor. The nominee’s claim will arise only after the death of both the joint holders.
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