(FAQ) SCSS

Senior Citizen Savings Scheme, 2004

Q. Can a joint account be opened with any person?

A. The account can be opened jointly with spouse only.

Q. What should be the age of spouse in case of a joint account?

A. In case of a joint account, age of 1st applicant / depositor is the only factor to decide the eligibility to invest under the scheme. There is no age bar/limit for the 2nd applicant / joint holder

Q. 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 1st applicant / Depositor only. Question of any share of the 2nd applicant / joint account holder (Spouse), therefore, does not arise.

Q. In case the depositor does not close the account on maturity and also not extend the account for a period of three years within a period of one year after maturity, how, the interest is to be calculated / paid after the maturity period?

A. The account shall be treated as matured and post maturity interest at the rate applicable to the deposits under Post Office Savings Accounts from time to time, shall only be admissible for the period beyond maturity in accordance with the rules. The amount of excess interest paid (at higher rate applicable to the deposits under SCSS) after maturity shall be deducted.

Q. Whether any Income Tax rebate / exemption is admissible?

A. No Income / Wealth Tax rebate and/or exemption is admissible under the scheme. The existing Income Tax provisions shall apply.

Q. Whether 'A' can open a joint account with his/her Spouse 'B' with maximum admissible deposits of Rs.15 lakhs and similarly 'B' can open another account individually or jointly with 'A', with any amount of deposit.

A. Yes. Both the Spouses can open individual and/or joint accounts with each other with the maximum deposits upto Rs.15 Lakh each, provided both are individually eligible to invest under relevant provisions of the rules governing the scheme.

Q. Whether new savings account is required to be opened for getting the interest credited periodically?

A. No such requirement is specified. The Depositors may get their interest, due on the deposits under the scheme, credited to their existing saving account (s), at the deposit office where their account may be single or joint, subject to the condition that the maximum limit of balance specified, if any, in the saving account, is not crossed by credit of the interest.

Q. Multiple withdrawals, as per requirements of the depositor, may be permitted.

A. No. There is, however, no bar on the depositors for opening of new/multiple accounts within the overall ceiling of Rs.15 lakh.

Q. Whether any fee is to be charged for nomination and/or change/cancellation of nomination?

A. No such fee has been specified.

Q. Can a depositor open more than one account under the scheme?

A. Any depositor may open an account at any deposit office by making an application in FORM -A along with the amount of deposit as per the pay-in-slip in FORM-D, duly filled in, along with age proof.

B. A depositor may operate more than one account under these rules subject to the condition that the deposits in all accounts taken together shall not exceed the maximum limit and provided that more than one account shall not be opened in the same deposit office during a calendar month.

C. A depositor may open the account in individual capacity or jointly with spouse.

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

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 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

Q. Can a person holding a Power of Attorney sign for the nominee in the nomination form?

A. No, a person holding a Power of Attorney cannot sign for the nominee in the nomination form.

Q. In case of a joint account, if the first holder / depositor expires before maturity, can the account be continued?

A. In case of a joint account, if the first holder / depositor expires before the maturity of the Account, the spouse may continue the account on the same terms and conditions as specified under the SCSS Rules. However, if the second holder i.e. spouse has his / her own individual account, the aggregate of his/her individual account and the deposit amount in the joint account of the deceased spouse should not be more than the prescribed maximum limit. In case the maximum limit is breached, then the remaining amount shall be refunded, so that the aggregate of the individual account and deceased spouse’s joint account is maintained at the maximum limit.

Q. What happens to the accounts if both the spouses are maintaining individual accounts and not any joint account and one of them expires?

A. If both the spouses have opened separate accounts under the scheme and either of the spouses dies during the currency of the account(s), the account(s) standing in the name of the deceased depositor/spouse shall not be continued and such account(s) shall be closed. The account can be closed by making an application in Form ‘F’. Annexures II & III to Form ‘F’ can be attested by the Oath Commissioner or Notary Public

Q. What is the age limit in the case of retired Defence Personnel for investment in the scheme?

A. The retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to subscribe under the scheme on attaining the age of fifty years subject to the fulfilment of other specified conditions. (The Senior Citizens Savings Scheme (Amendment) Rules, 2017 notified on December 12, 2017)

Q. What is the meaning of ‘retirement benefits’ for the purpose of SCSS, 2004?

A. "Retirement benefits" for the purpose of SCSS Rules have been defined as 'any payment due to the depositor on account of retirement whether on superannuation or otherwise and includes Provident Fund dues, retirement / superannuation gratuity, commuted value of pension, cash equivalent of leave, savings element of Group Savings linked Insurance scheme payable by employer to the employee on retirement, retirement-cum-withdrawal benefit under the Employees’ Family Pension Scheme and ex-gratia payments under a voluntary retirement scheme'.

Q. Can deposits under the SCSS scheme be made only from amounts received as retirement’s benefits?

A. In case an investor has attained the age of 60 years and above, the source of amount being invested is immaterial .However, if the investor is 55 years or above but below 60 years and has retired under a voluntary scheme or a special voluntary scheme or has retired from the Defence services, only the retirement benefits can be invested in the SCSS.

Q. Is there a period prescribed for opening deposit account under the SCSS scheme, by the senior citizen, from the retirement benefits?

If the investor is 60 years and above, there is no time period prescribed for opening the SCSS account(s). However for those below 60 years, following time limits have been prescribed.

A. the persons who have attained the age of 55 years or more but less than 60 years and who retired under a voluntary retirement scheme or a special voluntary retirement scheme on the date of opening of an account under these rules, subject to the condition that the account is opened by such individual within one month of the date of retirement benefits

B. The retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to subscribe under the scheme on attaining the age of fifty years subject to the fulfilment of other specified conditions. [Rule 2 of the Senior Citizens Savings Scheme (Amendment ) Rules, 2004]

Q. Can an account holder obtain loan by pledging the deposit / account under the SCSS, 2004?

A. The facility of pledging the deposit / account under the SCSS, 2004 for obtaining loans, is not permitted since the account holder will not be able to withdraw the interest amount periodically, defeating the very purpose of the scheme.

Q. Is premature withdrawal of the deposits from the accounts under the SCSS, 2004 permitted?

Premature withdrawal / closure of the deposits from the accounts under the SCSS, 2004 has been permitted after completion of one year from the date of opening of theaccount after deducting the penalty amount as given below.

A. If the account is closed after one year but before expiry of two years from the date of opening of the account, an amount equal to one and half per cent of the deposit shall be deducted. In case of undue hardship to any subscriber, the Ministry may consider request of such subscribers for premature closure of accounts before completion of one year on case to case basis.

B. If the account is closed on or after the expiry of two years from the date of opening of the account, an amount equal to one per cent of the deposit shall be deducted.

However, if the depositor is availing the facility of extension of account then he/she can withdraw the deposit and close the account at any time after the expiry of one year from the date of extension of the account without any deduction

Q. Can an account be transferred from one deposit office to another?

A. A depositor may apply in Form G, enclosing the Pass Book thereto, for transfer of his account from one deposit office to another. If the deposit amount is rupees one lakh or above, a transfer fee of rupees five per lakh of deposit for the first transfer and rupees ten per lakh of deposit for the second and subsequent transfers shall be payable. [Rule 11 and GOI Notification GSR.(E) dated March 23, 2006)

Q. Can an SCSS account be extended?

A. A depositor may extend the account for a further period of three years by making an application to the deposit office within a period of one year after maturity.

Q. What happens if an account is opened in contravention of the SCSS Rules?

A. If an account has been opened in contravention of the SCSS Rules, the account shall be closed immediately and the deposit in the account, after deduction of the interest, if any, paid on such deposit, shall be refunded to the depositor.

Q. Whether SCSS account can be opened in favour of a mentally retarded person to be operable by a Guardian appointed by the Court.

A. There is no such provision exists under Senior Citizen Savings Scheme. Therefore such account cannot be opened in favour of mentally retarded person.