Post Office Senior Citizen Savings Scheme (SCSS) remains the safest and highest interest yielding source of regular income for senior citizens. Backed by the Central Government, this scheme with an annual interest rate of 8.2% has interest paid directly into the investor's bank or post office savings account every 3 months (on quarterly basis). The total tenure of the scheme is 5 years, which can be extended for a further 3 years after maturity. Formula for calculation of interest: In SCSS, interest is calculated on the basis of simple interest, because it is not compounded but is taken out directly every quarter: Annual interest = Deposit amount × 8.2% Quarterly interest (Quarterly Payout) = Annual interest ÷ 4 Details of quarterly and total returns on investments of ₹10, ₹20 and ₹30 lakh Deposit amount (principal) Quarterly interest (every 3 months) Annual total interest Total interest in 5 years (20 quarters) Total amount after 5 years (principal + interest) ₹10,00,000 ₹20,500 ₹82,000 ₹4,10,000 ₹14,10,000 ₹20,00,000 ₹41,000 ₹1,64,000 ₹8,20,000 ₹28,20,000 ₹30,00,000 (maximum) ₹61,500 ₹2,46,000 ₹12,30,000 ₹42,30,000 At ₹10 lakh: ₹20,500 per quarter (i.e. average ₹6,833 per month). At ₹20 lakh: You will get ₹41,000 every quarter (i.e. an average of ₹13,667 per month). At ₹30 lakh: Depositing a maximum limit of ₹30 lakh will yield ₹61,500 every quarter (i.e. an average of ₹20,500 per month). When is the interest paid? As per post office rules, SCSS interest amount is automatically transferred to the account on four fixed dates in a year: 1st April (for January to March quarter) 1st July (for April to June quarter) 1st October (for July to September quarter) 1st January (for October to December quarter) Keep in mind tax rules and Form 15H Section 80C exemption: Income tax on the principal amount invested under the old tax regime. Under Section 80C, the benefit of deduction up to ₹ 1.5 lakh is available. Tax and TDS on interest: The interest received from the scheme is fully taxable. For senior citizens, tax exemption on interest up to ₹ 50,000 is available under Section 80TTB. If the total annual interest exceeds the limit, banks/post offices deduct TDS. If the total annual income is less than the taxable limit, Form 15H can be submitted at the beginning of the financial year to avoid TDS.
