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Senior Citizen Savings Scheme (SCSS) - Interest Rate FY 2023-24, Tax Benefits, & Eligibility

Updated on: 16 Feb, 2024 11:41 AM

Senior Citizen Savings Scheme account is a retirement benefits account that is backed by the government. Senior Citizen Savings Scheme provides a risk-free investment option with a regular income for the senior citizens of India. We can call it an apt investment choice for senior citizens above 60 years of age. If you are looking forward to investing your lump sum retirement funds and getting good returns, then the Senior Citizen Savings Scheme is meant for you.

As per budget 2023 amendments, “The maximum deposit for senior citizen saving scheme has been enhanced from Rs 15 lakhs to Rs 30 lakhs”.

What is the Senior Citizen Savings Scheme (SCSS)?

Senior Citizens Savings Scheme (SCSS) is a government-backed retirement benefits scheme designed to provide regular income to senior citizens. It is a safe investment option with a higher interest rate than other fixed-income options. It is a post office savings scheme specifically designed for senior citizens, providing a risk-free investment option with regular income.

Post office Senior Citizen Saving Scheme account can be opened with any post office, private bank, or public sector bank. SCSS aims to provide

  • Safest option to invest lump sum retirement funds
  • Regular earnings (quarterly) to senior citizens after retirement

Investing under this scheme also provides a tax deduction under section 80 C of the income tax. Read further to know the documents required, tax benefits, opening procedure, etc.

What are the features of the Senior Citizen Saving Scheme (SCSS)?

Tax Benefit: The amount invested is eligible for tax benefits upto Rs 1.5 lakhs under section 80C. Thus, it offers the highest safety and tax-saving benefits.

Extended Period: Even after the lock-in of five years, if you want, you can further extend the period of your investments by three years.

Joint Holding Permissible: You can hold a senior citizen savings scheme account with your spouse.

Maximum and Minimum Deposit Amount: The minimum deposit amount under SCSS is Rs.1,000, and the maximum is Rs.30 lakh. These deposits can be made in multiples of Rs.1,000.

Nominees: You can have one or more nominees to your senior citizen saving scheme account.

Lump Sum Investment: Gives you a secure option to invest the lump sum money you receive at the time of retirement. It is a government-backed savings scheme and provides the safest and most reliable investment options.

Mode of Deposit: Deposit can also be made in cash or DD. Electronic transfers are not compulsory. However, a deposit above 1 lakh has to be made by cheque.

Multiple Accounts: Holding more than one 5-year senior citizen saving scheme account up to the aggregate limit of Rs 30 lakhs is allowed.

Good Returns: Offers a good return with the current interest rate offered to be 8.2% compounded and paid quarterly.

Transfer of Accounts: An SCSS account can be transferred from a post office to a bank and vice versa.

Premature closure: Individuals can withdraw the amount after one year of opening an account. There is no charge for premature closure of the account within one year of opening it. However, a 1.5% charge will be deducted from the principal amount if the account is closed after one year but within two years of opening it. A 1% charge will be deducted from the principal amount if the account is closed after two years but within five years of opening it.

Eligibility for Senior Citizen Saving Scheme (SCSS)?

The Senior Citizen Saving Scheme (SCSS) is a savings scheme designed specifically for senior citizens of India who are 60 years of age or above. However, some eligible individuals who have attained the age of 55 years or more but less than 60 years and have retired under a voluntary or special voluntary retirement scheme can also invest in the SCSS.

In addition, individuals above 50 years of age and below 60 years of age who have retired from the defense on superannuation or under a voluntary or special voluntary retirement scheme can invest in the SCSS within one month of receiving retirement benefits.

Hindu Undivided Families (HUFs) and Non-Resident Indians (NRIs) are not eligible to invest in the Senior Citizen Saving Scheme.

What is the interest rate of the Senior Citizen Savings Scheme for FY 2023-24?

The Ministry of Finance determines the interest rates under the Government of India. The finance department reviews and revises the interest rates every quarter of the financial year. The current interest rate is fixed at 8.2% p.a. This interest rate is applicable from 1st quarter of FY 23-24. The interest will be paid quarterly.

If you are extending your account post-maturity, then the interest prevailing at that time will be applicable.

The interest rate is calculated and paid on different dates. Check the table below to know when your returns will be credited to your account:

Interest Rate on Senior Citizen Savings Scheme for FY 2023-24 (AY 2024-25)

Interest Period FY 2023-24 When the interest is calculated When the interest is paid/credited Interest Rate compounded and paid quarterly
April-June 2023 30th June 2023 1st July 2023 8.2% p.a.
July-Sep 2023 30th September 2023 1st October 2023 8.2% p.a.
Oct-Dec 2023 31st December 2023 1st January 2024 8.2% p.a.
Jan-March 2024 31st March 2024 1st April 2024 8.2% p.a.

What documents are required to open a Senior Citizen Savings Scheme account?

There is a list of documents you need to be eligible to open an account under the senior citizen saving scheme. Documents required are:

SCSS opening form 1
SCSS opening form 2
  • An account opening form duly filled and signed. The form is available online as well as with the post offices.
  • (PAN) Permanent Account Number of the account holder.
  • Address proof like aadhar or telephone bills.
  • Recent two passport-size photographs of the depositor. In the case of a joint account, pictures of both partners.
  • KYC documents.
  • Proof of age: any official document certifying your age like PAN, voter ID, birth certificate, or senior citizen card.
  • In case of retirement from service, a certificate from your employer is needed. The certificate should contain the following information:- the reason for retirement, benefits you are entitled to post-retirement, the position held while employed, and the duration of your employment.
  • Document stating the date of allocation of the retirement benefit to the retiree.

How does SCSS work?

The Senior Citizen Savings Scheme (SCSS) is a savings scheme specifically designed for senior citizens in India. Here is a step-by-step process of how the SCSS works:

  1. Eligibility: To open an SCSS account, you must be 60 years of age or older. However, individuals who are 55 years or older and have retired on superannuation or under a voluntary or special voluntary retirement scheme are also eligible.
  2. Account Opening: Visit an authorized bank or post office that offers SCSS accounts. Fill out the account opening form and provide the necessary documents, including age proof, identity proof, address proof, and a photograph.
  3. Investment Amount: Determine the amount you want to invest in the SCSS. The minimum investment is ₹1,000, and the maximum investment limit is ₹30 lakh. The investment must be made in multiples of ₹1,000.
  4. Account Type: You can open an individual account or a joint account with another eligible individual. In the case of a joint account, the first account holder must be a senior citizen.
  5. Tenure: The SCSS has a maturity period of five years from the date of account opening. After maturity, you have the option to extend the account for an additional three years.
  6. Interest Rate: The interest rate for the SCSS is determined by the government and is subject to change. The interest is calculated quarterly and credited to the account.
  7. Interest Payments: The interest earned on the SCSS account is paid out on a quarterly basis. It can be directly credited to your bank account or received through post-dated cheques.
  8. Tax Benefits: Investments made in the SCSS are eligible for tax benefits under Section 80C of the Income Tax Act up to a limit of ₹1.5 lakh in a financial year. However, the interest earned is taxable.
  9. Premature Withdrawal: Premature withdrawal from the SCSS account is allowed after the completion of one year. However, a penalty is applicable. If the account is closed between one year and two years, a penalty of 1.5% of the deposit amount is charged. After two years, the penalty reduces to 1%.
  10. Account Closure: At the end of the maturity period or extended tenure, you can close the SCSS account and receive the remaining principal amount along with any accrued interest.

How to open a Senior Citizens Savings Account?

Opening an account under SCSS is very simple. Gather the required documents and follow the step-by-step process to open an account under the 5-year Senior Citizen Saving Scheme:

  • Visit any post office or bank authorized to open a senior citizen savings scheme account.
  • Fill out the account opening form.
  • Collect all the documents, self-attest them, and submit them along with the filled account opening form
  • Once your account is opened, you will be given your account’s ‘passbook.’ Your passbook will include your account number, opening date, your (depositor’s) name, address, photograph, and account tenure. It will also contain information on the deposits made and the interest rate payable after the end of every quarter.

How to fill in the Post Office SCSS application form

To fill in the Post Office Senior Citizen Savings Scheme (SCSS) application form, follow these steps:

  • Obtain the form: Visit your nearest post office and request the SCSS application form. The form may also be available for download from the official website of India Post.
  • Personal details: Fill in your personal information in the designated fields. This includes your full name, date of birth, address, contact details, and any other required personal information.
  • Nomination details: Provide the details of your nominee(s) in the specified section of the form. This includes the nominee's name, relationship to you, and their address.
  • Account type: Indicate whether you are opening an individual account or a joint account. If it is a joint account, provide the necessary details of the joint account holder, including their name, age, and relationship to you.
  • Investment amount: Specify the amount you wish to invest in the SCSS. Ensure that the investment amount is in multiples of ₹1,000 and does not exceed the maximum limit of ₹30 lakh.
  • Supporting documents: Attach the required supporting documents, such as proof of age (e.g., photocopy of a valid government-issued identity document like an Aadhaar card, PAN card, or passport), address proof, photographs, and any other documents specified by the post office.
  • Signature: Sign the application form at the designated place.
  • Submit the form: Once you have completed the form and attached the necessary documents, submit the application form along with the required investment amount at the post office counter.
  • Acknowledgement receipt: The post office will provide you with an acknowledgment receipt for your SCSS application. Keep this receipt safe for future reference.

What are the tax benefits under the Senior Citizen Savings Scheme?

The Senior Citizen Saving Scheme (SCSS) offers tax benefits under Section 80C of the Income Tax Act 1961. The investment made in the SCSS is eligible for deduction from taxable income up to a maximum limit of Rs. 1.5 lakh in a financial year, along with other eligible investments like Public Provident Fund (PPF), Equity-Linked Savings Scheme (ELSS), etc.

Additionally, the interest earned on the SCSS investment is taxable as per the investor's income tax slab. However, as the SCSS is a scheme backed by the government, the interest earned on the investment is exempt from tax deducted at source (TDS) up to Rs. 50,000 in a financial year. However, this exemption is applicable only to senior citizens who are 60 years or older. For those who are 55 years or older but less than 60 years, TDS will be applicable on the interest earned above Rs. 10,000 in a financial year. If the interest earned exceeds Rs. 50,000 in a financial year, TDS will be applicable on the excess amount.

It is important to note that the SCSS investment is subject to a lock-in period of 5 years, which can be extended for an additional period of 3 years. However, the extension can be done only once, and the interest rate for the extended period will be the prevailing rate at the time of extension.

Earning interest on your Senior Citizen Saving Scheme (SCSS) but worried about exceeding the TDS limit? Our Tax Advisory Service can help! Our experts can guide you through maximizing your SCSS benefits and ensuring your taxes are filed accurately, even if your interest income exceeds the ₹50,000 threshold for TDS deduction.

Senior Citizen Savings Scheme: Maturity Period and Premature Withdrawals

Five years is the tenure or maturity period of the Senior Citizen Saving Scheme. If you want, you can extend the account's maturity for three more years, but this needs to be done before the account reaches maturity. Under this scheme, premature withdrawals are allowed, but they come with certain conditions:-

  • Premature withdrawals are allowed only after one year of account opening.
  • If you withdraw after one year but before two years of account opening, then the charges levied on the deposits will be 1.5% of the deposits.
  • If you withdraw after two years from account opening, then 1% of deposits will be charged as a penalty. If the account is closed prematurely due to the death of the depositor, then no charges will be levied on the deposits.

Upon maturity, you can either close your account and receive the maturity amount, or you can extend the tenure of your account by three more years. If you wish to close your account, you must submit a ‘Closure form’ along with your account passbook. A duly filled ‘Extension form’ will be required to extend the account after maturity.

If the depositor doesn’t take any action upon maturity, then the deposits will continue to earn interest at the rate determined for the post office savings scheme.


At the time of maturity - the investment made is exempt in the year of investment, but withdrawals are taxable.

At the time of premature withdrawal

  1. On the death of the depositor - if premature withdrawal is made due to the death of the depositor, then the principal amount is not chargeable to tax. However, tax is still levied on the interest amount received by legal heirs or nominees.
  2. In other cases - if the amount invested in the senior citizen savings scheme is withdrawn before maturity except in case of death, then the complete amount received, i.e., principal and interest, are taxable.

In case of extension - No tax benefits are available.

What is the Nomination facility under SCSS?

While opening the account, you can name a nominee in the account opening form. You must appoint a nominee as it comes in handy in a dire situation like the sudden demise of the depositor. You can also appoint a ‘minor’ as your nominee. For appointing a minor as your nominee, you will need to submit the birth certificate and the details of the minor’s guardian Appointing and changing a nominee can be done unlimited number of times since the process is free of charge.

Do not Fret if you fail to appoint a nominee while opening your savings account. You also have the facility of appointing a nominee during the tenure of your account. All you need to do is fill out the ‘nomination form’ and submit it where you have your savings account. In case of nominating a nominee for a joint account, consent of all the depositors will be required in the form of signatures on the nomination form.

List of banks that offer SCSS

You have the facility to transfer your account from one post office/bank to another post office/bank. All you need to do is fill out the ‘account transfer form’ and submit it where you have your savings account. You will be charged a nominal amount to fulfill this transfer facility.

You must furnish correct information in the form while opening an account. If the officials discover false information, your account will be rendered inoperative immediately. Your investment amount will be refunded after deducting the accumulated interest already credited to your account.

You can open your account at any post office across India. Apart from the post office, the Government authorized 24 public sector banks and one private bank to offer the benefits of the Senior Citizen Saving Scheme. ICICI Bank is the only private limited bank that offers this facility. Under public sector banks, these banks have the authority to open accounts under SCSS:

  • Punjab National Bank
  • Indian Bank
  • Andhra Bank
  • State Bank of India
  • Syndicate Bank
  • Canara Bank
  • UCO Bank
  • Allahabad Bank
  • Bank of Maharashtra
  • IDBI Bank
  • Vijaya Bank
  • United Bank of India
  • Indian Overseas Bank
  • Union Bank of India
  • Dena Bank
  • Central Bank of India
  • Corporation Bank
  • Bank of India
  • Bank of Baroda
  • ICICI Bank
Senior Citizen Saving Scheme

FAQs on Senior Citizen Saving Scheme (SCSS)

Q- Is senior citizen savings scheme (SCSS) interest rate compounding or simple?

SCSS interest rate is compounded, and payable quarterly.

Q- Can a senior citizen saving scheme under the post office or SBI be considered collateral for a loan?

No, SCSS under the post office or SBI can not be considered collateral for the loan.

Q- How many accounts can be opened in a single name in a senior citizen saving scheme?

A senior citizen can invest in this scheme by opening either an individual or a joint (along with the spouse) account. You can invest in any number of SCSS accounts, limiting the threshold to adding all the accounts.

Q- Can a senior citizen saving scheme A/C be transferred from one branch to another of the same bank?

Yes. Just like a PPF account a senior citizen savings scheme account can be transferred from one branch to another branch of the same bank, one bank to another bank, and bank to post office, and vice versa is also possible.

Q- Can a senior citizen invest Rs. 150000 in the Senior Citizen Savings Scheme (SCSS) every year to get an 80C deduction under the Income Tax Act of India?

An amount deposited under the Senior Citizens Savings Scheme Rules, 2004, is eligible for a deduction of Rs.1.50 lakhs under section 80C of the Income Tax Act, 1961.

Q- Is an extension of investment under the post office senior citizen savings scheme eligible for an 80C benefit on extension?

The initial maturity term of investment is five years; however, this can be further extended to another three years.

Q- Can I pay from a third-party account for a senior citizen saving scheme account opening?

To open an SCSS account, senior citizens can visit the post office or bank branch and fill out the form. The form should be accompanied by KYC documents—proof of age, address proof, identity proof, and payment instrument, i.e., a cheque for the deposit amount. Also, the nomination can be made while opening the account or at a later date.

Q- If someone has already invested Rs.15 lakhs in the Senior Citizen Saving Scheme in the State Bank of India, can he/she apply for 15 lakhs more in the Senior Citizen Saving Scheme in the post office?

Previously, this limit was capped at Rs 15 lakh, but now, after the announcement of the 2023 budget, this limit has been enhanced to 30 lakhs.

Q- Are NRI senior citizens eligible to avail of senior citizen FD rates on NRO/NRE fixed deposits?

All the residents and NRI senior citizens above the age of 60 are eligible for fixed deposit schemes offered by the banks and post offices. NRI senior citizens can open a fixed deposit under the non-resident external (NRE) and non-resident Ordinary (NRO) categories.

CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.