Latest Senior Citizens Savings Scheme (SCSS) interest rate for January- March 2024

Every quarter, the government sets the interest rate on SCSS. The government has not raised the SCSS interest rate for the current quarter. Account holders may receive an 8.2% interest return on their deposits. The interest is paid quarterly and is completely taxable.

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The account shall be opened with a minimum deposit of Rs. 1,000 or any sum in multiples of Rs. 1,000 not exceeding Rs. 30,00,000. The tenure of the deposit is 5 years and can be further extended by 3 years.

The government issued a notification on November 7, 2023, making several important changes in the popular Senior Citizen’s Savings Scheme (SCSS). Below are he changes as per the latest notification.

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A retired individual of more than 55 years of age but below 60 years of age will now have three months’ time to invest retirement benefits in the SCSS. Earlier, a retired individual had to invest within 1 month of the receipt of retirement benefits.

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The government has significantly relaxed the criteria for spouses of government employees who died on the job. The new laws allow a government employee’s spouse to invest the financial aid amount in the plan. This will be permitted if the deceased government employee was above the age of 50 and died while on the job. This benefit is available to all central and state government employees who are qualified for retirement or death benefits.

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The government has also specified the scope or meaning of the retirement benefits. As per the notification, retirement benefit means any payment received by the individual due to retirement or superannuation. This includes provident fund dues, retirement or superannuation or death gratuity, commuted value of pension, leave encashment, savings element of group savings linked insurance scheme payable by the employer on retirement.

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The government changed the regulations for the SCSS scheme’s expansion. The account holder may continue to prolong the account for a n number of blocks of three years each. Furthermore, for each extension, an application must be made. Previously, the extension could only be granted once.

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The government has also revised the interest that an individual will be entitled to if they extend the scheme after maturity of five years. As per the new rule, in case the SCSS account gets extended on maturity, the deposit will earn an interest rate applicable to the scheme on the date of maturity or on the date of extended maturity.

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The maximum deposit amount in the scheme shall not exceed the allowed deposit limit. This includes the deposit made at the time of opening of the account shall be paid on or after the expiry of five years or after the expiry of each block period of three years. As per the notification, “The deposit made at the time of opening of account shall be paid on or after the expiry of five years or after the expiry of each block period of three years where the account was extended under paragraph 8 from the date of opening of account. Provided that after the closure of the existing account or accounts, new accounts or accounts may be opened again as required by the depositor subject to the maximum deposit limit.”

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