SCSS Calculator
Your quarterly income, and whether you will actually pay tax on it
Will you actually pay tax on this?
What leaving early costs you
| If you close at | What happens | You walk away with |
|---|---|---|
| Enter an amount | ||
- Quarterly interest is deposit × 8.2% ÷ 4. SCSS pays simple interest quarterly and does not compound.
- The rate is fixed at the current 8.2%. Once your account is open, that rate is locked for all five years even if the government revises it later.
- Interest is credited on 1 April, 1 July, 1 October and 1 January.
- Your principal is returned in full at maturity. It does not grow.
- The tax position uses the old regime, where Section 80TTB gives senior citizens a ₹50,000 deduction on interest income and the basic exemption is ₹3,00,000. Section 80C on the deposit and 80TTB on the interest are not available under the new regime.
- Deposits must be in multiples of ₹1,000, minimum ₹1,000.
The Tax Question Every Retiree Asks, and No Calculator Answers
Most SCSS calculators tell you your quarterly income and stop. But the question that actually matters to a retiree is different.
Will I have to pay tax on this, and will TDS be deducted?
Senior citizens have two reliefs that change the answer completely, and they work independently of each other.
Section 80TTB gives you ₹50,000 free
Senior citizens can deduct up to ₹50,000 of interest income under Section 80TTB, available under the old regime. That comes straight off your SCSS interest before tax is calculated.
The basic exemption is ₹3,00,000
For someone aged 60 to 80, no tax is payable on total income up to ₹3,00,000.
Put those together and a deposit of ₹15 lakh, generating ₹1,23,000 a year, leaves ₹73,000 of taxable interest, well inside the exemption. Someone with no other income pays nothing at all.
But TDS is a separate question
This is where people get caught. TDS is deducted once your SCSS interest crosses ₹1,00,000 in a year, a threshold raised from ₹50,000 in Budget 2025.
That happens regardless of whether you actually owe tax. You could be well below the exemption limit and still have TDS deducted, then have to claim it back when you file.
The fix is Form 15H. Submit it at your post office or bank at the start of the financial year, declaring that your income is below the taxable limit, and no TDS is deducted. The calculator above tells you when this applies to you.
How SCSS Works
| Rule | Detail |
|---|---|
| Interest rate | 8.2% per year, paid quarterly, the joint highest small savings rate |
| Rate lock | Fixed for your full 5 year term from the day you open the account |
| Payout dates | 1 April, 1 July, 1 October, 1 January |
| Tenure | 5 years, extendable in blocks of 3 years |
| Minimum deposit | ₹1,000, in multiples of ₹1,000 |
| Maximum deposit | ₹30 lakh per person, across all SCSS accounts |
| A couple | ₹60 lakh combined, through two separate accounts |
| Who can open it | Residents aged 60 and above; 55 to 60 on superannuation or VRS; 50 and above for defence personnel |
| Who cannot | NRIs and HUFs |
| Joint account | With spouse only. The first depositor must meet the age condition. |
| Compounding | None. Interest is paid out, not reinvested. |
| Tax deduction on deposit | Section 80C, old regime |
| Where to open | Any post office, or an authorised bank |
The First Year Is the Trap
SCSS allows you to close the account early, but the penalty structure is unusual and the first year is punishing.
- Before 1 year: no interest is paid at all, and any interest already credited to you is recovered. You get your principal back and nothing else.
- Between 1 and 2 years: 1.5% of the deposit is deducted.
- Between 2 and 5 years: 1% of the deposit is deducted.
- On the death of the holder: no penalty at all. The nominee receives the full amount.
Notice the shape of that. The penalty after the first year is mild, only 1.5% falling to 1%, and you keep every rupee of interest you have received. The severity is concentrated entirely in the first twelve months.
Partial withdrawal is not permitted at any stage. You cannot take out part of the money. It is full closure or nothing, which is why splitting a large amount across more than one account can be worth considering.
Premature closure uses Form 2, and only one premature closure is permitted per account.
Extending After Five Years
When your SCSS matures, you have three choices.
Take the money
The full principal is returned along with the final quarter's interest.
Extend in blocks of 3 years
You must apply within one year of maturity. Following an amendment in November 2023, accounts can be extended in multiple three year blocks rather than only once, provided you apply within a year of each maturity.
Two things to understand about an extension:
- The rate changes. An extended account earns the rate prevailing at the time of extension, not the rate you originally locked in.
- The lock loosens. During an extension you can close the account after one year without any penalty at all. That is a meaningful gain in flexibility over the original five year term.
Open a fresh account
If you are still within the ₹30 lakh overall limit, you can open a new account at the rate prevailing then.
What You Get, at Each Deposit Level
| You deposit | Every quarter | Monthly average | Every year |
|---|---|---|---|
| ₹5,00,000 | ₹10,250 | ₹3,417 | ₹41,000 |
| ₹10,00,000 | ₹20,500 | ₹6,833 | ₹82,000 |
| ₹15,00,000 | ₹30,750 | ₹10,250 | ₹1,23,000 |
| ₹20,00,000 | ₹41,000 | ₹13,667 | ₹1,64,000 |
| ₹30,00,000, one person's maximum | ₹61,500 | ₹20,500 | ₹2,46,000 |
| ₹60,00,000, a couple's maximum | ₹1,23,000 | ₹41,000 | ₹4,92,000 |
In every case, the full principal comes back at the end. SCSS pays an income, it does not grow your capital.
The Couple Strategy
The ₹30 lakh cap applies per person, across all their accounts.
A married couple can therefore hold ₹60 lakh in SCSS between them, by opening two separate accounts of ₹30 lakh each rather than one joint account.
That produces ₹1,23,000 every quarter, or roughly ₹41,000 a month, entirely government backed.
There is a tax advantage too. Each person separately claims the ₹50,000 deduction under Section 80TTB and each has their own ₹3,00,000 basic exemption. Two accounts of ₹30 lakh are treated as two people's income, not one.
Who SCSS Suits
It suits you if you are 60 or above, have a lump sum from retirement, and want the highest guaranteed income available with government backing. At 8.2%, it beats every bank fixed deposit for senior citizens.
It does not suit you if you might need part of the money back, since partial withdrawal is not allowed. Consider splitting the amount across two or three accounts so you can close one without touching the rest.
If you need money monthly rather than quarterly, the Post Office Monthly Income Scheme pays every month instead, though at a lower 7.4%. Many retirees hold both.
Opening an Account
- Go to any post office or an authorised bank. The rate and rules are identical everywhere, because the terms are set centrally.
- Carry your Aadhaar, PAN, proof of age, and passport size photographs.
- If you are between 55 and 60 and applying on the basis of retirement, carry proof of your retirement benefits. The deposit must be made within one month of receiving them.
- Deposit by cheque for amounts above ₹1 lakh. Cash is accepted only below that.
- Nominate a beneficiary. This matters, because on death the nominee receives the full amount with no penalty.
- Submit Form 15H if your total income is below the taxable limit, to stop TDS being deducted.
Accounts are transferable across India between post offices and banks.
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