Senior Citizen Savings Scheme: How to save TDS on SCSS interest income
Senior Citizen Savings Scheme (SCSS) is an attractive scheme for senior citizens which offers 8.2% interest for the July-September quarter. An individual can invest up to Rs 30 lakh in SCSS. Interest earned on the SCSS investment is taxable per the investor's income tax slab. TDS is also deducted if the interest received from the SCSS investment exceeds a specified threshold.
Who can invest in the Senior Citizen Savings Scheme?
Anyone aged 60 and above can invest in this scheme. Retired individuals aged above 55 years but below 60 years can also opt for this scheme if they invest within a month of receiving retirement benefits. The tenure of SCSS is five years, however, if you wish you can extend it for another three years on maturity.
Here’s how and when TDS is deducted from SCSS interest
According to CA Abhishek Soni, co-founder, of Tax2Win, if interest earned from SCSS exceeds Rs 50,000 in a financial year, TDS will be deducted. “However, if your income is below the basic exemption limit then you may submit Form 15G/H and prevent TDS from getting deducted,” he says.
Forms 15G and 15H are self-declaration forms that individuals can submit to declare their income below the basic exemption limit. This helps in avoiding TDS deductions. «Form 15G is a declaration under Section 197A of the Income-tax Act, 1961. It can be submitted by individuals below 60 years of age and Hindu Undivided Families (HUF). Form 15H is a declaration under Section 197A (1C) that can be submitted by senior citizens (aged 60 years and
