All About Tax-Free Senior Citizen Savings Scheme (SCSS)

Last Updated: 26 Sep 2025

Among the various tax-saving schemes available from the government, one of the most popular among senior citizens is the SCSS. It was launched in 2004. It is a part of the post office savings scheme. This blog covers the meaning and features of SCSS in detail.

What is SCSS?

The Senior Citizens Savings Scheme (SCSS) is for Indian residents above the age of 60 years. The SCSS deposit has a typical maturity of 5 years. But this is extendable by another 3 years. One of the reasons the SCSS is popular in India is that the rate of interest is extremely attractive compared to other similar products.

The rate of interest in SCSS has ranged between 8.3% and 8.6% and is currently at 8.26%. Senior citizens (being resident Indians) are eligible to buy SCSS from PSU and private banks as well as through the post offices. Being government-backed, the principal and interest components are fully secured.

Senior Citizen Savings Scheme (SCSS) – Key Highlights

Key Highlights The SCSS interest rate is 8.2% per year. You can claim tax benefits under Section 80C on the money you deposit. Non-Resident Indians (NRIs) cannot open an SCSS account.

Key Features of the SCSS Scheme

The SCSS has emerged as a veritable source of savings for senior citizens, and here are some of the highlights of this senior citizen deposit scheme:

Attractive Interest Rates

The senior citizen saving scheme interest rate is 8.2%. The rate is checked every three months by the Finance Ministry. It is usually higher than fixed deposit rates.

Deposit Limits

You can start with as little as ₹1,000. The maximum you can put is ₹15 lakhs. Up to ₹1 lakh can be paid in cash. More than that must go through the bank.

Maturity Period and Extension

The scheme runs for 5 years. You can extend it once for 3 more years. After 8 years, you must close the account.

Eligibility Criteria

People above 60 years old can join. Retired people between 55 and 60 years can also join if they apply within one month of getting retirement benefits. NRIs and HUFs cannot apply.

Tax Benefits

Money put into SCSS can get tax savings under Section 80C, up to ₹1.5 lakhs per year. Interest earned is taxable. TDS is cut if the interest is above ₹50,000 in a year.

Interest Payouts

Interest is calculated every year for this post office scheme for senior citizens. It is paid out once a year into your linked savings account.

Availability Across Banks and Post Offices

You can open an SCSS at post offices and some banks. Not every bank branch offers it. The process is offline, so you need to visit the branch.

Documentation Required

You only need a few documents. PAN card and Aadhaar are must-haves.

Joint Accounts and Nomination

You can open SCSS alone or with your spouse. If you do not open jointly, you must give a nominee. You can name one or more people as nominees.

Premature Withdrawal Rules

You can close the account early, but there is a penalty. If closed before 2 years, the penalty is 1.5% of the deposit. If closed after 2 years but before 5 years, the penalty is 1%. Tax savings under Section 80C are also taken back.

Conclusion

SCSS gives safe government-backed returns that are higher than many other options. Tax savings make it even better. The scheme is a little rigid in that it only permits one-time investment, irrespective of the amount. But the easy and simple points of sale make it highly convenient.