Post Office Scheme : After retirement, many people worry about having a regular source of income. If you are one of them, then you must know about the Post Office Senior Citizen Savings Scheme (SCSS). Through this scheme, senior citizens can earn up to ₹2,46,000 per year. Apart from this, the scheme offers several other benefits as well. Read below to know all the details.
What Do You Need to Do to Earn?
SCSS is specially designed for senior citizens. To earn income through this scheme, you need to deposit a fixed amount. Your earnings come from the interest on this deposit. Generally, the investment is made for 5 years, but if you wish, you can extend it for another 3 years.
Post Office Scheme : Three Major Benefits of the Scheme
Investing in this Post Office scheme offers three major benefits.
First, it provides an attractive interest rate, helping you earn a good income.
Second, the deposited amount is completely safe and is returned to you after maturity.
Third, the scheme also offers tax benefits.
How Much Can You Invest?
Under SCSS, you can invest a maximum of ₹30,00,000, while the minimum investment amount is ₹1,000. Currently, the scheme offers an interest rate of 8.2% per annum.
How to Earn ₹2,46,000 Annually
As mentioned earlier, you can deposit up to ₹30,00,000 in this scheme. Most retirees receive a lump sum amount at the time of retirement. If you invest ₹30,00,000 in SCSS at an interest rate of 8.2% for 5 years, you will earn ₹12,30,000 as total interest over five years.
₹12,30,000 ÷ 5 = ₹2,46,000 per year
This way, you can earn ₹2,46,000 annually.
Interest Is Paid Quarterly
The interest amount is credited on a quarterly basis. If you invest ₹30,00,000, you will receive ₹61,500 every quarter as interest. If calculated monthly, this comes to around ₹20,500 per month.
Tax Benefits
Investment in SCSS qualifies for tax deduction under Section 80C of the Income Tax Act. However, the interest earned under this scheme is taxable. If your income exceeds the prescribed limit, TDS (Tax Deducted at Source) may be applicable.
How Many Times Can the Scheme Be Extended?
If you wish to continue the scheme after maturity, you can extend it. The account can be extended for 3 years at a time. You can extend it multiple times in blocks of three years. To do so, you must submit a prescribed form at the post office within one year from the maturity date or after the completion of every 3-year extension period.
The interest rate applicable on the extended account will be the rate prevailing on the date of maturity or the date of extension.