Want To Support Your Retired Mother? SCSS Lets You Gift Rs 30 Lakh Without Any Tax

News18

18-05-2025

Last Updated:
SCSS: Any gift from a son or daughter to their senior citizen mother for investment in SCSS is tax-free under Section 56 of the Income Tax Act.
SCSS: A Win-Win for Tax Saving and Retirement Planning
SCSS: Planning to secure your mother's retirement while looking for an option to save taxes as well. You can gift your senior citizen mother up to Rs. 30 lakhs for investment in the Senior Citizens' Savings Scheme (SCSS) FDR. This regular interest income helps her stay self-reliant in her old age.
CA Kinjal Shah, Secretary BCAS has decoded SCSS scheme and its tax implications.
Senior Citizens' Savings Scheme (SCSS) – Key Highlights
SCSS is a government-backed fixed deposit scheme offering assured returns for senior citizens.
Eligibility:
– Individuals aged 60 years and above.
– Individuals aged 55-60 years who have retired under Superannuation, VRS, or Special VRS.
– Retired Defence Services personnel aged 50 years and above (excluding civilian employees).
The account can be opened individually or jointly with a spouse.
You can deposit a minimum of Rs 1,000 and a maximum of Rs 30 lakhs, in multiples of Rs 1,000.
The tenure is 5 years from the date of account opening.
The account can be extended for an additional 3 years after maturity.
Interest is payable quarterly on the first working day of April, July, October, and January. Interest does not accrue further if it is not claimed.
The account can be closed prematurely after one year, subject to specific conditions.
Investment Deduction (Section 80C): Deduction up to ₹1.50 lakhs is available in the year of investment.
Interest Income: The interest income is taxable.
Interest Deduction (Section 80TTB): Deduction up to ₹50,000 can be claimed on the total interest earned from deposits in banks, post offices, etc., including SCSS.
Tax Implications Under SCSS
Any gift from a son or daughter to their senior citizen mother for investment in SCSS is tax-free under Section 56 of the Income Tax Act.
How to Open an Account
SCSS accounts can be opened at public and private sector banks or post offices. To open an account, fill out the application form and submit your PAN card, address proof, and passport-size photographs. Deposits below ₹1 lakh can be made in cash, while amounts above ₹1 lakh must be made by cheque. Upon successful submission, an SCSS account will be opened, and a passbook will be provided.
First Published:
May 18, 2025, 11:18 IST