SCSS interest rate: How much will you earn on Rs 5 lakh investment?

New Delhi: The Senior Citizen Savings Scheme (SCSS) is a secure investment option available to individuals aged 60 years and above. Here, you can opt for a one-time lump sum investment. Joint accounts are permitted only with a spouse. Currently, the scheme offers a guaranteed interest rate of 8.2 per cent per annum, with a tenure of 5 years that can be extended for an additional 3 years upon maturity.

SCSS investment

Investments in SCSS can be started with a minimum of Rs 1,000, up to a maximum of Rs 30 lakh, in multiples of Rs 1,000. Deposits are eligible for tax benefits under Section 80C of the Income Tax Act. Interest is paid quarterly, with payment dates falling on 31st March, 30th June, 30th September, and 31st December. Unclaimed interest for any quarter does not accrue additional interest but can be auto-credited to a designated savings account.

SCSS interest rate

Now, considering an investment of Rs 5 lakh, and Rs 10 lakh each in the Post Office SCSS with a 5-year tenure and an interest rate of 8.2% per annum, let’s analyse the potential returns. So with a principal amount of 5 lakh was invested in this scheme. Over the course of five years, the investment accrued a total interest of ₹ 2,05,000, with quarterly interest payments amounting to ₹ 10,250. At maturity after five years, the total amount received from the scheme was ₹ 7,05,000.

SCSS tax deductions

In a Financial year, a deduction of Rs 1,50,000 can be claimed under Section 80 C of the Income Tax Act on the investments made in Senior Citizens Savings Scheme (SCSS), However, the interest received on SCSS is fully taxable as per the recipient’s income tax slab. Tax Deducted at Source (TDS) is applicable if the interest received exceeds Rs 50,000 per year.

For premature closures, SCSS accounts can be closed anytime, but no interest is payable if closed within 1 year of opening. If closed between 1 to 2 years, 1.5 per cent of the principal amount will be deducted as a penalty.

 SCSS Investment: One of then benefits of opening a Senior Citizen Savings Scheme (SCSS) is that it can be closed prematurely anytime. Also you will benefit of Tax under section 80C of the Income Tax Act  Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today