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The Government has issued a notification on 31st March 2023 announcing the increase in the Senior Citizens’ Savings Scheme (SCSS) deposit limit to Rs 30 lakh per account, along with the SCSS interest rate to 8.2%.
This increase is in line with the announcement made in the Budget 2023 by the Finance Minister, Nirmala Sitharaman, where she stated that the SCSS deposit limit would be increased from Rs 15 lakh per account to Rs 30 lakh.
The official notification from the Finance Ministry stated that the scheme has been revised “in exercise of the powers conferred by section 3A of the Government Savings Promotion Act, 1873 (5 of 1873), the Central Government”.
With the commencement of the new deposit limit, senior citizens will now be able to deposit up to Rs 30 lakh in their SCSS accounts. In the case of senior citizens and their spouses having separate SCSS accounts, they will be eligible to deposit Rs 30 lakh each in their respective accounts.
The Government has also increased the SCSS interest rate for the first quarter (April-June) of the new financial year 2023-24, which starts today. Depositors of SCSS will earn 8.2% interest during April-June.
In December of last year, the Government had increased the SCSS interest rate to 8% for the January-March quarter of FY 2022-23.
The deposits made by senior citizens in their SCSS accounts are eligible for tax deduction under Section 80C of the Income Tax Act, subject to a limit of Rs 1.5 lakh per year.
SCSS deposits mature in 5 years, but the scheme provides an option to extend the account for another three years.
This move by the Government will provide a great opportunity for senior citizens to invest in the SCSS scheme and earn higher interest rates, which is beneficial for those who rely on the interest income to support their livelihood.
The increase in the SCSS deposit limit will also encourage more people to invest in the scheme, thereby providing a boost to the Indian economy.