February 8, 2010

INDIA: It's 9% interest remains a bonanza for senior citizens

. AHMEDABAD, Gujarat / The Times of India / February 8, 2010 It’s a bonanza for those in their ripe old age. The Government of India's Senior Citizens Savings Scheme -2004 (SCSS), offering 9% annual returns with added benefit of getting tax incentive under Section 80C, has emerged as a popular choice of the elderly for catering to their regular income needs. Deposits under SCSS are required to be made with any post office or authorised banks or institutions and should not exceed Rs 15 lakh (Rs.1.5 million). The account can be opened either in his/her individual capacity or jointly with spouse. The minimum tenure of the deposit is five years which can be extended for a period of three more years. And, even though withdrawal is not permitted, any conditional premature withdrawal can be done which will attract tax in the year of withdrawal. As per tax benefit, investment under SCSS within the overall limit of Rs 100,000 is treated as eligible for deduction from the gross total income of the investor. The 9% annual interest received under SCSS is taxable and liable to TDS if the same exceeds Rs 10,000 in a financial year. However, if the total income of the investor is below the taxable limit, he can request for non-deduction of tax. [rc] Copyright © 2010 Bennett, Coleman & Co. Ltd.