Centre notifies changes to Senior Citizen Saving Scheme; all you need to know | Mint
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Business News/ Money / Personal Finance/  Centre notifies changes to Senior Citizen Saving Scheme; all you need to know
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Centre notifies changes to Senior Citizen Saving Scheme; all you need to know

Spouses of government employees who have passed away are now qualified to participate in the Senior Citizen Saving Scheme.

The SCSS is a savings scheme supported by the government. (Mint)Premium
The SCSS is a savings scheme supported by the government. (Mint)

The Indian government has granted permission for the spouses of deceased government employees to establish Senior Citizen Saving Scheme (SCSS) accounts. This decision ensures essential financial security for these individuals.

For those unfamiliar, the SCSS is a savings scheme supported by the government, featuring appealing interest rates and various advantages, including tax exemption and principal protection. It is accessible to individuals aged 60 years or older, or those who have retired at the age of 55 years or above.

In the past, the spouses of deceased government employees were barred from opening SCSS accounts. Nevertheless, the government has recently lifted this restriction, enabling these individuals to take advantage of the appealing features offered by the SCSS.

Additionally, a significant modification allows SCSS accounts to be extended for multiple consecutive blocks of three years without any imposed limit. This enhancement provides increased flexibility for account holders, enabling them to derive benefits from the scheme for an extended duration.

Retired personnel from the defence services (excluding civilian defence employees) remain qualified to establish an SCSS account once they reach the age of fifty, regardless of the age at which they retire.

Additional concessions

Ideally, this scheme is accessible to individuals who are sixty years or older at the account opening date. Alternatively, those aged 55 or more but less than 60 years old, who have retired due to superannuation, can also qualify.

The Indian government has prolonged the timeframe for retired government employees to initiate a SCSS account from one month to three months following the receipt of retirement benefits.

This adjustment is well-received, as it affords retired government employees an extended period to establish an SCSS account, enabling them to capitalise on the appealing interest rates and additional benefits provided by the scheme.

Alongside evidence of the date of retirement benefits disbursement, retired government employees must include a certificate from their employer specifying retirement details, retirement benefits, and employment history with the employer.

Previously, the account extension was considered effective from the date of application. However, the government has recently amended this rule, and the extension of the account is now deemed to have occurred from the date of maturity or the conclusion of each three-year block period, regardless of the application date.

To effectuate the extension, the account holder must apply Form-4 within one year from either the date of maturity or the conclusion of each three-year block period.

This implies that account holders will commence earning interest at the extended rate from the date of maturity or the conclusion of each three-year block period, regardless of when they submit the extension application. This represents a beneficial change, ensuring that account holders do not miss out on any interest.

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Published: 13 Nov 2023, 07:27 PM IST
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