Delhi, India: The decision to raise the maximum amount that can be invested to Rs 30 lakh starting in the following fiscal year is anticipated to be utilized by as much as 10% of the seven lakh senior citizens who are currently taking full advantage of the Senior Citizens Savings Scheme (SCSS).
According to information provided by the finance ministry, approximately 15% of the scheme's 50 lakh subscribers currently use the entire allowance, which currently provides 8% annually. While making a contribution of up to Rs. Section 80C of the Income Tax Act allows for benefits worth $5 lakh, and the scheme's interest is taxable.
Experts in taxation say that post-tax returns should be taken into account, but government officials think that even though earnings are taxed, they still give the best returns. The post-tax return amounts to approximately 5 for a person in the 30% tax bracket. 6%. The decision to raise the limit was made in response to requests from some subscribers.
According to officials, a significant portion of the increase in the small savings kitty has been budgeted to come from the SCSS. After seeing a dip during the current fiscal year, the government anticipates that small savings schemes like the public provident fund and post office deposits will see an increase during the following year. It is planned that the net accretion will rise by 7. 4% to more than Rs. 7 million crore.
The Monthly Income Scheme is expected to provide the other source of accretion; the investment limit has been increased from Rs 9 lakh for joint accounts to Rs 15 lakh for single accounts. At the moment, the plan provides 7. to subscribers at 1%. The Mahila Samman Savings Certificate, a new tool for women, has a two-year tenure and will be open for subscription until March 2025. This is the third area where gains are anticipated.
Officials from the government stated that it will be an appealing instrument that can be used to deposit funds for every sector, despite the fact that the amount of money that could be received is unknown. The scheme's specifics have not yet been determined, but the BJP government at the center views it as an effort to reach out to women voters and provides 7. 5% interest rate. A bank official stated, "With the exception of the senior citizen's interest rate, none of the banks offer this kind of return on fixed deposits."