Is Senior citizen saving scheme eligible for 80C tax exemption ? Allahabad Bank says NO

POSTED BY Sudha Baisantry ON March 14, 2014 8:50 am COMMENTS (6)

Is the SCSS eligible for tax benefit under Sec 80c.When I approached Allahabad Bank , for this scheme for my mother who is  80 yrs old, I was informed that there is no Tax exemption. However my colleagues inform me that since 2007-2008 ( assessment year 2008-2009 ) this scheme is covered under sec 80c and  tax exemption is available . Who is correct ?

6 replies on this article “Is Senior citizen saving scheme eligible for 80C tax exemption ? Allahabad Bank says NO”

  1. Sudha Baisantry says:

    Dear Mr Ashal,

    Thanks , will check with other banks also regarding the FD.

    Regards
    Sudha

  2. ashalanshu says:

    Dear Sudha, please check with some other banks also. For Sr. Citizen even Tax saver FDs carry a bit higher rate of interest. As only 70K has been invested in SCSS, your mother can invest 1L Rs. every year for next 14Y to be eligible for tax benefit.

    By the way, bank has nothing to do with section 80c benefit on SCSS. Once your mother invests in, she w’d have to file and claim the same in her income tax return. 🙂

    Thanks

    Ashal

  3. Sudha Baisantry says:

    Dear Mr Ashalanshu,

    Thanks for such a prompt response.
    I did not know that there was a cap of 15 lac on SCSS. My mom has invested only 70k, so I suppose the limit is available.
    I am aware that the Bank FD ( 5 yr term) are available, but the ROI was lower than the 9.3% offered by the SCSS.The bank informed that for the tax saver FD there is no distinction for senior citizen and rates are the same. !
    Regards
    Sudha

  4. ashalanshu says:

    Dear Sudha, if the full 15L Rs. maximum allowed limit has been exhausted in the 1st year itself, your mother can not invest more in 2nd year. By the way, Tax saver FDs of banks are also an option for your mother as being Sr. citizen, she ‘ll get a bit higher ROI.

    Thanks

    Ashal

  5. Sudha Baisantry says:

    Dear Mr Ashalanshu,

    Thanks . This essentially means that we will need to re invest in the scheme for the next FY if we need to get the 80c benefit, right ?

    Regards
    Sudha

  6. ashalanshu says:

    Dear Sudha, SCSS is eligible for 80C benefit only in the financial year of scheme opening i.e. initial deposit year. After that no more benefit from next FY.

    thanks

    Ashal

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