The senior savings program is a safe and reliable investment option for older people. This program not only offers financial stability, but also makes life easier.
Seniors savings program: The interest rate of the senior citizens’ savings program (SCSS), which is regarded for older people as a reliable source of financial security and regular income, was set for the quarter in April to June 2025. This time the government has not made any changes to the interest rates of small savings, which means that the interest rate of SCSS remains 8.2% per year. This program is available via post offices and selected banks and is very popular with seniors who are looking for stable income after retirement. The government checks the interest rates of these systems every quarter, but this time it was decided to keep interest rates stable.
SCSS not only offers the possibility of a secure investment, but also services such as tax exemption and interest payment every three months. In this scheme, an account with at least 1,000 rupees can be opened and the maximum investment limit is up to 30 rupees. Let us understand the rules, the interest rate, taxation and the premature closure conditions of this system in detail.
Interest and investment conditions
Seniors who invest in SCSS will receive an annual interest rate of 8.2%from April to June 2025. This interest is paid in the account of three months in the account, which regularly supports the elderly. The government checks the interest rates every quarter, but this time there was no increase or reduction. This means that this time investors receive the same sentence as in the last quarter.
In order to open an account in this scheme, at least 1,000 RS must be stored, and then the amount can be increased in multiple of 1,000. However, a senior citizen cannot invest more than 30 rupees in this program. This limit applies to the overall investment of all active SCSS accounts. The duration of the system is 5 years, which can be extended 3 years later. It is advantageous for those who want stable returns for a long time.
Tax rules and services
The investment in SCSS also offers tax relief. According to section 80c of the Income Tax Act, investors can apply for up to 1.5 LAKH. However, the interest obtained from this program are completely taxable. If the entire interest rates exceed all SCSS accounts in a financial year RS 1 Lakh, TDS (tax deduction at source) will be deducted. In the past, this limit was 50,000 RS, but in the 2025 budget it was increased to 1 LAKH. This new rule came into force from April 1, 2025.
If investors submit the form 15g or 15 hours and their total income is below the prescribed limit, TDS will not be deducted. This facility is particularly helpful for older people who only have limited income and want to avoid additional tax burdens.
Rules for closing the account before time
SCSS also gives investors flexibility. After opening the account, it can be closed at any time, but there are some conditions and punishments for it. If the account is closed 1 year ago, no interest is specified and the interest previously accumulated will also be withdrawn. At the same time, a penalty of 1.5% of the capital amount for closure after 1 year was deducted 2 years ago. If the account is closed after 2 years, but 5 years ago, 1% will be deducted.
After completing the 5-year period, the account can be extended by 3 years. There is no penalty in this extended period if the account is closed after 1 year. These rules give investors the freedom to make a decision according to their needs, but caution before the premature retreat is recommended.
What are the conditions in SCSS?
If the account holder dies before the period of 5 years, the interest rate of the Post savings account applies to the account. But if the account is the only candidate together in the name of husband and wife or one of the husband and wife, you can continue the account for the basic interest rate of SCSS. For this it is necessary that you are entitled to SCSS yourself and that your total investment limit does not exceed over 30 LAKH.
The account matures after 5 years and to close it, an application must be submitted together with the tensioning book in the post office. If the investor wishes, he can extend the account by 3 years within 1 year after maturity. During this time, the interest rate above the due date of the original account is the interest rate for new SCSS accounts.
