Tenure and premature withdrawal of fund

There is tenure of five years of Post Office Senior Citizen Savings Scheme. There is tenure of five years. One may, however, add three more years to their investment in the plan. Additionally, the interest rate for the longer tenure would remain at the current rate.

The investor must fill out paperwork in order to extend the scheme's duration. The investors must complete Form B and submit it to the branch. A single tenure extension for the scheme is also permitted.

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Premature withdrawals are permitted from SCSS accounts, however, there are fees associated with them. The penalty varies according to how long the account has been opened. The investor has the right to make an early withdrawal after one year from the date the account was opened. The following are the sanctions for early withdrawals:-

(1) 1.5% of the investment or deposit amount will be assessed as a penalty for any investments removed before the full two years have passed.

(2) There is a 1% penalty on the amount deposited if the money is removed after the account has been open for two years. Additionally, after the first year, there is no penalty fee for accounts with longer tenure.

The account will be cancelled if the investor passes away before the account matures. All revenues will be given to the candidate or the legitimate heir. For this, a form must be completed and submitted with the death certificate by the legal heir or nominee.

Get tax benefits under section 12a.

Conclusion

The Seniors Savings Program A programme for older persons is called SCSS. It is a long-term investment choice that gives investors a steady income.

Due to its guaranteed income and low risk, it is the perfect investment choice. Other investing alternatives, however, are useful for long-term planning and achieving retirement objectives.

Debt funds are a different type of investment that elderly individuals can use to achieve their retirement objectives. Even though they cannot guarantee returns, debt funds have a better return potential than other retirement investing alternatives. Additionally, debt fund returns are predictable. This is a result of their investments in debt instruments including reputable corporate and government securities.

Debt mutual funds also don't have a lock-in period. The gains, however, are taxed. Returns on assets are liable to short-term capital gains taxes if held for less than three years. The gains are taxed at the appropriate income tax slab rate for the investor. Long Term Capital Gains Tax of 20% with indexation is applied to returns on investments held for longer than three years.

One can get tax deductions under section 80g of the Income Tax Act. 

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