2. Can a joint account be opened
under the scheme with any person ?
Reply : Joint account under the
SCSS, 2004 can be opened only with the spouse [ Rule 3 (3)]
3. What should be the age of
the spouse in case of a joint account ?
Reply : In case of a joint account,
the age of the first applicant / depositor is the only factor to decide the
eligibility to invest under the scheme. There is no age bar/limit for the second
applicant / joint holder (i.e. spouse) [Rule 3 (3)]
4. What will be the share of
the joint account holder in the deposit in an account ?
Reply : The whole amount of investment
in an account under the scheme is attributed to the first applicant / depositor
only. As such, the question of any share of the second applicant / joint account
holder (i.e. spouse) in the deposit in the account, does not arise. [Rule 3
(3)]
5. Whether both the spouses
can open separate accounts in their individual capacity with separate limit
of Rs.15 lakh for each of them ?
Reply : Yes. Both the spouses can
open individual and / or joint accounts with each other with the maximum deposits
upto Rs.15 lakh each, provided both are individually eligible to invest under
relevant provisions of the Rules governing the scheme (Rules 3 and 4 )
6. Whether any income tax rebate
/ exemption is admissible ?
Reply : No income tax / wealth
tax rebate is admissible under the scheme. The prevailing income tax provisions
shall apply (GOI letter F. No.2/8/2004/NS-II dated October 13, 2004)
7. Is TDS applicable to the
scheme ?
Reply : Yes, TDS is applicable
to the scheme as interest payments have not been exempted from deduction of
tax at source. The facility of furnishing a declaration in Form No. 15H (prescribed
under the Income Tax Rules, 1962) is available to a person (payee) resident
in India and who is of the age of 65 years or more at any time during the previous
year (since a person who has attained 65 years or more at any time during the
previous year only is treated as a Senior Citizen under the provisions of Income
Tax Act, 1961). A declaration in Form 15 G can be furnished by a depositor of
less than 65 years of age. In cases where a certificate under Section 197(1)
of the Income Tax Act, 1961 from the Assessing Officer is furnished, the agency
banks / post offices shall not deduct tax at source or, as the case may be,
deduct at a lower rate as specified in the certificate. (GOI letter F. No.2/8/2004/NS-II
dated March 28, 2006)
8. Whether any minimum limit
has been prescribed for deduction of tax at source ?
Reply : Tax is to be deducted at
source if the interest paid or payable exceeds Rs.5000/- during the financial
year. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
9. What is the rate at which
TDS is to be deducted from the account holder ?
Reply : The rate for TDS for a
financial year is specified in Part II of Schedule I of the Finance Act for
that year. The prescribed rate for the financial year 2006-2007 are as under
:
In the case of a person other
than a company ;
(a) Person resident in India –
10 %
(b) Others – 20 %
The amount so deductible shall
be enhanced by surcharge calculated as per the following rate :
In the case of Individual, HUF,
Association of Person and Body of Individuals – 10% if the interest paid / payable
exceeds Rs.1000000/-
The amount of "TDS+Surcharge"
shall be further enhanced by 2 % of "TDS+Surcharge" on account of
education cess (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006).
10. Whether TDS should also
be recovered from the undrawn interest payable to the legal heirs of the deceased
depositors ?
Reply : Tax shall be deducted at
source even from any interest paid / payable to the legal heir of the account
holder. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
11. Whether TDS on interest
payments will be applicable with retrospective effect or prospective basis ?
Reply : TDS is applicable from
the very first day that SCSS, 2004 was made operational regardless of the fact
that the Central Government or Reserve Bank of India or any authority might
have issued any Notification / circular / clarification at a later stage (GOI
letter F. No.2/8/2004/NS-II dated June 06, 2006)
12. Whether only one person
or number of persons can be nominated in the accounts opened under the Scheme
?
Reply : The depositor may, at the
time of opening of the account, nominate a person or persons who, in the event
of death of the depositor, shall be entitled to payment due on the account [Rule
6 (1)]
13. Can a nomination be made
after the account has already been opened ?
Reply : Yes. Nomination may be
made by the depositor at any time after the opening of the account but before
its closure, by an application in Form C accompanied by the Pass book to the
deposit office [Rule 6 (2)]
14. Can a nomination be cancelled
or changed ?
Reply : Yes. The nomination made
by the depositor may be cancelled or varied by submitting a fresh nomination
in Form C to the deposit office where the account is being maintained [Rule
6 (3)]
15. Can nomination be made in
joint account also ?
Reply : Nomination can be made
in joint account also. In such a case, the joint holder will be the first person
entitled to receive the amount payable in the event of death of the depositor.
The nominee’s claim shall arise only after the death of both the joint holders
[Rule 6 (4)]
16. Can a person holding the
Power of Attorney sign for the nominee in the nomination form ?
Reply : No. The person holding
the Power of Attorney cannot sign for the nominee in the nomination form (GOI
letter No. F.15/8/2005/NS-II dated March 02, 2006)
17. In case of a joint account,
if the first holder / depositor expires before maturity, can the account be
continued ?
Reply : In case of a joint account,
if the first holder / depositor expires before the maturity of the account,
the spouse may continue the account on the same terms and conditions as specified
under the SCSS Rules. However, if the second holder i.e. spouse has his / her
own individual account, the aggregate of his/her individual account and the
deposit amount in the joint account of the deceased spouse should not be more
than the prescribed maximum limit. In case the maximum limit is breached, then
the remaining amount shall be refunded, so that the aggregate of the individual
account and deceased spouse’s joint account is maintained at the maximum limit
[Rules 6 (4) and 8 (3)]
18. What happens to the accounts
if both the spouses are maintaining individual accounts and not any joint account
and one of them expires ?
Reply : If both the spouses have
opened separate accounts under the scheme and either of the spouses dies during
the currency of the account(s), the account(s) standing in the name of the of
the deceased depositor / spouse shall not be continued and such account(s) shall
be closed [Rule 5 of the Senior Citizens Savings Scheme (Amendment) Rules, 2004
notified on October 27, 2004]
19. Whether any fee has been
prescribed for nomination and / or change / cancellation of nomination ?
Reply : No fee has been prescribed
for nomination and / or change / cancellation of nomination(s) in the accounts
under the SCSS, 2004 (GOI letter F. No.2/8/2004/NS-II dated October 13, 2004)
20. What is the age limit in
the case of retired on superannuation or retired Defence Personnel for investment
in the scheme ?
Reply : The retired personnel of
Defence Services (excluding Civilian Defence Employees) shall be eligible to
subscribe under the scheme irrespective of the age limit of 60 years subject
to the fulfillment of other specified conditions (The Senior Citizens Savings
Scheme (Amendment) Rules, 2004 notified on October 27, 2004)
21. What do you mean by ‘retirement
benefits’ for the purpose of SCSS, 2004 ?
Reply : "Retirement benefits"
for the purpose of SCSS Rules have been defined as 'any payment due to the depositor
on account of retirement whether on superannuation or otherwise and includes
Provident Fund dues, retirement / superannuation gratuity, commuted value of
pension, cash equivalent of leave, savings element of Group Savings linked Insurance
scheme payable by employer to the employee on retirement, retirement-cum-withdrawal
benefit under the Employees’ Family Pension Scheme and ex-gratia payments under
a voluntary retirement scheme' (Rule 2 (a) of the Senior Citizens Savings Scheme
(Amendment) Rules, 2004 notified on October 27, 2004)
22. Can deposits under the SCSS
scheme be made only from amounts received as retirements benefits ?
Reply : In case an investor has
attained the age of 60 years and above, the source of amount being invested
is immaterial [rule 2 (d)(i)]. However, if the investor is 55 years or above
but below 60 years and has retired under a voluntary scheme or a special voluntary
scheme or has retired from the defence services, only the retirement benefits
can be invested in the SCSS [rule 2(d)(ii)].
23. Is there a period prescribed
for opening deposit account under the SCSS scheme, by the senior citizen, from
the retirement benefits?
Reply : If the investor is 60 years
and above, there is no time period prescribed for opening the SCSS account(s).
However for those below 60 years, the time period prescribed are :
(a) the persons who have attained
the age of 55 years or more but less than 60 years and who retired under a voluntary
retirement scheme or a special voluntary retirement scheme on the date of opening
of an account under these rules, subject to the condition that the account is
opened by such individual within three months of the date of retirement.
(b) the persons who have retired
at any time before the commencement of these rules and attained the age of 55
years or more on the date of opening of an account under these rules, shall
also be eligible to subscribe under the scheme within a period of one month
of the date of this notification (27th October 2004), subject to fulfillment
of other conditions [rule 2 of the Senior Citizens Savings Scheme (Amendment
) Rules, 2004]
(c) the retired personnel of Defence
Services (excluding Civilian Defence Employees) shall be eligible to subscribe
under the scheme irrespective of the above age limits subject to the
fulfillment of other specified conditions [rule 2 of the Senior Citizens Savings
Scheme (Amendment ) Rules, 2004]
24. Can an account holder obtain
loan by pledging the deposit / account under the SCSS, 2004 ?
Reply : The facility of pledging
the deposit / account under the SCSS, 2004 for obtaining loans, has not been
permitted since the account holder will not be able to withdraw the interest
amount periodically, defeating the very purpose of the scheme (GOI letter F.
No.2/8/2004/NS-II dated May 31, 2005)
25. Is premature withdrawal
of the deposits from the accounts under the SCSS, 2004 permitted ?
Reply : Premature withdrawal /
closure of the deposits from the accounts under the SCSS, 2004 has been permitted
after completion of one year from the date of opening of the account after deducting
the penalty amount as given below :
(i) If the account is closed after
one year but before expiry of two years from the date of opening of the account,
an amount equal to one and half per cent of the deposit amount shall be deducted.
(ii) If the account is closed on
or after the expiry from the date of opening of the account, an amount equal
to one per cent of the deposit shall be deducted
However, if the depositor is availing
the facility of account under Rule 4 (3), then he can withdraw the deposit and
close the account at any time after the expiry of one year from the date of
extension of the account without any deduction.
[Rule 9 (1) (a) (b) and (2)]
26. Are Non-resident Indians,
Persons of Indian Origin and Hindu Undivided Family eligible to invest in the
SCSS, 2004 ?
Reply : Non resident Indians (NRIs),
Persons of Indian Origin (PIO) and Hindu Undivided Family (HUF) are not eligible
to invest in the accounts under the SCSS, 2004. If a depositor becomes a Non-resident
Indian subsequent to his opening the account and during the currency of the
account under the SCSS Rules, the account may be allowed to continue till maturity,
on a non-repatriation basis and the account shall be marked as a Non-Resident
account [Rule 13 and GOI letter F.No.2/8/2004/NS-II dated June 19, 2006)
27. Can an account be transferred
from one deposit office to another ?
Reply : A depositor may apply in
Form G, enclosing the Pass book thereto, for transfer of his account from one
deposit office to another, in case of change of residence. If the deposit amount
is rupees one lakh or above, a transfer fee of rupees five per lakh of deposit
for the first transfer and rupees ten per lakh of deposit for the second and
subsequent transfers shall be payable [Rule 11 and GOI Notification GSR..(E)
dated March 23, 2006)
28. What happens if an account
is opened in contravention of the SCSS Rules ?
Reply : If an account has been
opened in contravention of the SCSS Rules, the account shall be closed immediately
and the deposit in the account, after deduction of the interest, if any, paid
on such deposit, shall be refunded to the depositor (Rule 12)
29. Can you please furnish the
names of banks handling SCSS, 2004 ?
Reply : At present there are 24
Nationalised banks and one private sector bank which are handling the SCSS,
2004. The list is given below :
- State Bank of India
- State Bank of Hyderabad
- State Bank of Indore
- State Bank of Bikaner and Jaipur
- State Bank of Patiala
- State Bank of Saurashtra
- State Bank of Mysore
- State Bank of Travancore
- Allahabad Bank
- Bank of Baroda
- Bank of India
- Bank of Maharashtra
- Canara Bank
- Central Bank of India
- Corporation Bank
- Dena Bank
- Indian Bank
- Indian Overseas Bank
- Punjab National Bank
- Syndicate Bank
- UCO Bank
- Union Bank of India
- United Bank of India
- Vijaya Bank
- ICICI Bank Ltd.
It may be noted that only designated branches of
these banks have been authorized to handle SCSS, 2004.