Senior Citizen Savings Scheme interest rate April-June 2023: The Finance Ministry has increased the Senior Citizen Savings Scheme (SCSS) interest to 8.2%. This rate will be applicable in the first quarter of FY 2023-24 starting tomorrow (April 1). For the fourth quarter of FY 2022-23, the SCSS interest rate was 8%.
From April 1, the SCSS deposit limit has increased to Rs 30 lakh per account as announced in Budget 2023. Along with SCSS, the Government has also revised the interest rates of some other small savings schemes like Sukanya Samriddhi Yojana, Kisan Vikas Patra, Post Office Fixed Deposits, Post Office Monthly Income Scheme and Post Office Recurring Deposit. There is no change in Public Provident Fund (PPF) interest rate.
SCSS provides attractive benefits to senior citizens. Investment under this scheme qualifies for deduction under Section 80C of the Income Tax Act.
The interest earned from SCSS deposits is payable to the account holder on a quarterly basis. In case the interest is above Rs 50,000 in a year, it is taxed at the prescribed TDS rate. However, no TDS is deducted if the accrued interest is not above Rs 50,000 in a year and the accountholder submits Form 15G/15H.
The minimum deposit allowed under SCSS is Rs 1000 and thereafter in multiples of Rs 1000, subject to a maximum limit of Rs 15 lakh in all SCSS accounts. However, this limit will soon increase to Rs 30 lakh.
A senior citizen can open the SCSS account individually or jointly with spouse only. However, the whole amount deposited in a joint account is attributable to the first account holder only. Senior citizens are also allowed to prematurely close their SCSS account.
The Government revises interest rates for various small savings schemes on a quarterly basis. The next revision of the interest rates will happen by June 30, 2023.