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Budget 2021

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Moneycontrol

Budget 2021

Associate Partners:

  • SMCSamsungVolvo

Budget 2021 | SBI report suggests to waive income tax on Senior Citizens Savings Schemes’ interest

SBI report said that "Government has an excellent scheme for senior citizens. Under the Senior Citizens Savings Scheme (SCSS), a senior citizen can deposit Rs 15 lakh. However, the interest on the Scheme is fully taxable which is a major drawback of this scheme. We propose a full tax rebate of this interest income".

January 13, 2021 / 09:00 AM IST
Image: Pixabay

Image: Pixabay

SBI economists in a report have suggested that Senior Citizens Savings Scheme should be made tax-free by the government in the February 1, 2021, Budget. A higher tax-free interest income limit from deposits by senior citizens, it also suggested.

SBI report said that "Government has an excellent scheme for senior citizens. Under Senior Citizens Savings Scheme (SCSS), a senior citizen can deposit Rs 15 lakh. However, the interest on Senior Citizens Savings Scheme is fully taxable which is a major drawback of this scheme. We propose full tax rebate of this interest income".

If Senior Citizens Savings Scheme total interest income is more than Rs 50,000 TDS is deducted, but if form 15 G/15H is submitted then no TDS will be deducted.

SBI report also said that "Under 80TTB interest income from deposits by senior citizen (Savings bank accounts, fixed deposits, recurring deposit accounts) up to Rs 50,000 is exempted from income tax. This threshold may be increased to Rs 1 lakh".

An interest rate of 7.4 percent is offered under the Senior Citizen Savings Scheme. Senior Citizen Savings Scheme account can be opened by an individual above 60 years of age with few exemptions to this rule. The government allows those below the age of 60 to open the Senior Citizen Savings Scheme with some conditions.

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A term of five years which can be extended for Senior Citizen Savings Scheme. A maximum investment limit of Rs 15 lakh per individual.

Retired civilian employees above 55 years of age and below 60 years of age can also open Senior Citizen Savings Scheme, subject to the condition that investment is made within 1 month of receipt of retirement benefits.

Retired defense employees above 50 years of age and below 60 years of age are also eligible to open the Senior Citizen Savings Scheme, subject to the condition that investment to be made within 1 month of receipt of retirement benefits.

On a quarterly basis, interest under the scheme is payable and it is applicable from the date of deposit to March 31/ June 30/September 30/December 31.
Moneycontrol News
first published: Jan 13, 2021 09:00 am

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