Tax Benefits of Senior Citizen Savings Scheme (SCSS): A Comprehensive Guide

The Senior Citizen Savings Scheme (SCSS) is a government-backed savings scheme designed to provide a regular income and tax benefits to senior citizens in India. This scheme offers a higher interest rate than other fixed-income options and is eligible for tax deductions under Section 80C of the Income Tax Act.


To be eligible for the SCSS, individuals must meet the following criteria:

  • Be an Indian citizen aged 60 years or above
  • Individuals who have retired under a voluntary or special voluntary retirement scheme between the ages of 55 and 60 are also eligible
  • Hindu Undivided Families (HUFs) and Non-Resident Indians (NRIs) are not eligible

Tax Benefits

Investments made in the SCSS are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum limit of Rs. 1.5 lakhs in a financial year. This means that the amount invested in the SCSS can be deducted from the taxable income, thereby reducing the tax liability.

Interest Rate

The interest rate for the SCSS is determined by the Ministry of Finance and is reviewed every quarter. The current interest rate is 8.2% p.a., compounded and paid quarterly.

Investment Details

  • Minimum investment amount: Rs. 1,000
  • Maximum investment amount: Rs. 30 lakhs
  • Investment can be made in multiples of Rs. 1,000
  • Deposits can be made in cash or through electronic transfers

Tenure and Premature Withdrawal

  • Tenure: 5 years
  • Premature withdrawal is allowed after one year of account opening
  • Penalty for premature withdrawal:
    • 1.5% of the principal amount if withdrawn between 1 and 2 years
    • 1% of the principal amount if withdrawn after 2 years


  • Nomination facility is available
  • You can have one or more nominees

Documents Required

  • Account opening form
  • PAN card
  • Address proof
  • Recent passport-size photographs
  • KYC documents
  • Proof of age (PAN card, voter ID, birth certificate, or senior citizen card)
  • In case of retirement from service, a certificate from the employer is needed

How to Open an SCSS Account

  • Visit an authorized bank or post office
  • Fill out the account opening form
  • Submit the required documents
  • Once the account is opened, you will receive a passbook containing your account details

The Senior Citizen Savings Scheme (SCSS) offers a combination of tax benefits, a higher interest rate, and a safe investment option for senior citizens in India. By understanding the eligibility criteria, tax benefits, and investment details, senior citizens can make informed decisions and maximize the benefits of this scheme.

Senior Citizen Savings Scheme (SCSS) | Eligibility Criteria, Interest Rate, 80C Tax Benefit, Tenure

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