Centre notifies changes to Senior Citizen Saving Scheme; all you need to know

The government of India has allowed spouses of deceased government employees to open Senior Citizen Savings Scheme (SCSS) accounts. This decision ensures essential financial security for those people.

For those unfamiliar, SCSS is a government-backed savings scheme with attractive interest rates and various benefits, including tax exemption and principal protection. It is accessible to individuals who are 60 years of age or older, or those who have retired at 55 years of age or older.

In the past, spouses of deceased government employees were barred from opening SCSS accounts. However, the government has recently removed this restriction, allowing these individuals to take advantage of the attractive features offered by the SCSS.

In addition, a significant modification allows SCSS accounts to be extended for multiple consecutive blocks of three years without any imposed limit. This enhancement provides increased flexibility to account holders, enabling them to benefit from the scheme for a longer period.

Personnel who have retired from the defense services (excluding defense civilian employees) remain eligible to set up an SCSS account when they reach the age of fifty, regardless of their retirement age.

Additional concessions

Ideally, this scheme is accessible to individuals who are sixty years or older on the date of account opening. Alternatively, those aged 55 or over but under 60, who have retired on superannuation, can also qualify.

The Indian government has extended the time frame for retired government employees to open a SCSS account from one month to three months after receiving retirement benefits.

This adjustment is well received, as it gives retired government employees a long period to set up a SCSS account, enabling them to capitalize on the attractive interest rates and additional benefits provided by the scheme.

Along with evidence of the disbursement date of retirement benefits, retired government employees must submit a certificate from their employer detailing retirement details, retirement benefits, and employment history with the employer.

Previously, the account extension was considered effective from the date of application. However, the government recently amended this rule, and account extension is now considered to have occurred from the maturity date or the end of each three-year block period, regardless of the application date.

To complete the extension, the account holder must apply Form-4 within one year from the maturity date or from the end of each block period of three years.

This implies that account holders will start earning interest at the extended rate from the maturity date or from the end of each three-year block period, regardless of when they submit the extension application. This is a beneficial change, ensuring that account holders do not lose any interest.

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Updated: 13 November 2023, 07:27 PM IST

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