The government has made major changes in small savings schemes including PPF and Senior Citizen Saving Scheme. Recently there has been an increase in investment in small saving schemes. Small Savings Schemes are also called Post Office Schemes.
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For some time now, it has been continuously seen that people are investing a lot of money in Public Provident Fund (PPF), Senior Citizens Savings Scheme (SCSS) and Time Deposit Scheme. Therefore, the government has relaxed some rules by issuing a gazette notification. At present the government runs 9 types of small savings schemes.
According to the notification, a person can open an account under the Senior Citizen Savings Scheme within three months from the date of retirement. This notification was issued on November 9. According to this, interest will be given at the fixed rate for the scheme on the date of maturity or extended maturity.
Under the new rules, you will get 3 months time to open an account under Senior Citizens Savings Scheme (SCSS). At present this period is only for one month. According to the notification, a person can open a SCSS account within three months from the date of retirement. This gazette notification was issued on 9 November. According to this, interest will be given at the fixed rate for the scheme on the date of maturity or extended maturity.
The rules for premature withdrawal under the National Savings Time Deposit Scheme (NSTDS) have been changed. If the amount deposited in an account with a tenure of 5 years is prematurely withdrawn after 4 years from the date of account opening, interest will be payable at the rate applicable to Post Office Saving Scheme. According to the current rules, in the above situation, interest is given at fixed rate for 3 years savings account.
On many of these schemes, you can get exemption of up to Rs 1.5 lakh under Section 80C of Income Tax. People are investing heavily in small savings schemes like Senior Citizen Savings Scheme and Mahila Samman Savings Certificate. Investment in these schemes has reached record levels. Investment in these schemes increased 2.6 times compared to last year to Rs 74,675 crore. The government had increased the annual investment limit in these schemes to Rs 30 lakh.
In view of this, the government is now also considering post tax returns while deciding the quarterly rates, especially for small savings schemes like PPF. By the end of September, investment in small savings schemes increased 2.6 times compared to last year to Rs 74,675 crore. It was Rs 28,715 crore in the same period last year. The government had doubled the annual investment limit in these schemes to Rs 30 lakh. Only after this, investment in these schemes has increased.
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