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SCSS_TDS

 SCSS - RECOVERY OF TDS

(1). Interest payments under Senior Citizens Savings Scheme, 2004 are not exempted from deduction of tax at source. It is required to deduct income tax at source. 

(2). TDS will not be applicable on the total aggregate interest income up to Rs 50,000/- in a financial year payable in case of all SCSS Accounts opened by Senior Citizens of the age of 60 years and above. However, this limit will not be applicable to those SCSS Account holders who have opened SCSS under the relevant provisions of relaxed SCSS Rules for (i) individuals who have attained age of 55 years or more but less than 60 years and retired on superannuation or (ii) Personnel of Defence Services who have attained age of 50 years (excluding Civilian Defence Employees) and not attained age of 60 years. For such account holders, current limit of Rs. 40,000/- shall continue.

(i). The rate of TDS and surcharge on the interest paid/payable will be at the rate fixed by the Government from time to time. TDS shall be payable even from the interest paid/payable to the nominee/legal heir of the account holder.
 
(ii). If a declaration in Form 15-G is furnished by a depositor of less than 60 years of age that the tax on his/her estimated total income for the financial year is NIL and the aggregate amount of interest credited or paid during the financial year is not more than the maximum amount which is not chargeable to tax i.e thresh hold limit fixed by the Government for a particular financial year, TDS will not be deducted. 

(iii). If the depositor of 60 years of age or above furnishes a declaration in Form No. 15-H that the tax on his/her estimated total income for the financial year is NIL, the TDS will not be deducted.

(3). Form 15-G and 15-H as applicable and as amended from time to time is required to be furnished by the depositors once in a financial year. This form is to be furnished by the Depositor(s) in duplicate. The second copy of the form will be sent by the in-charge of the post office concerned to the Income Tax authorities within a week after close of the month. The depositor should give his/her complete postal address in Form 15-G or 15-H. (4). TDS certificate is to be issued in Form 16 A within the period prescribed from time to time by the Head Post Master.

As per FS division letter No. FS-10/1/2022-FS-DOP dated 26.4.2024, TDS in respect of quarterly interest of SCSS accounts should not be deducted without giving time to the investors for filing Form 15G/15H.  Complaints have been received from the investors that TDS was recovered from their SCSS accounts on 1.4.2024  itself before filing Form 15G/15H. In all such cases, the investors should be allowed to file the above forms and if they are found eligible for exemption of TDS, refund should be granted by the Post offices.  For this purpose, provision is made in Finacle upto 30.4.2024.