Senior Citizen Savings Scheme (SCSS)

The “Senior Citizen Savings Scheme” (or SCSS) is a deposit scheme specially meant for elderly citizens.

Features / Overview of the Senior Citizen Savings Scheme (SCSS)

Age Criteria:

The investment can be made only by people of 60 years of age or above. People who have retired on superannuation or under a voluntary retirement scheme can also invest if they are at least 55 years old. People retiring from defense services are eligible to invest in the scheme irrespective of the age limit, but there are some additional conditions applicable.

Other Restrictions

The Senior Citizen Savings Scheme account can be opened only by individuals. It can not be opened by Non-Resident Indians (NRI), Persons of Indian Origin (PIO) and Hindu Undivided Families (HUF).

Source of Funds

For people between 55 and 60 years of age, the amount invested in SCSS has to come from their retirement benefits. For persons over the age of 60 years, there is no restriction on the source of funds invested.

Maturity

The Senior Citizen's Savings Scheme has a maturity of 5 years, which is extendable by 3 years.

 Interest Rate

The rate of interest offered on the investment is 9% per annum.

Interest Payment

The interest is computed and paid out every quarter. That is, the interest is paid out every three months.

Income Tax Treatment

There is Section 80C income tax benefit on the investment made in SCSS, but there is no income tax benefit on the interest earned from it. The investment made in the Senior Citizen Savings Scheme on or after 1st April, 2008 is deductible from your income under section 80C of the Income Tax Act. The interest earned on the deposit is fully taxable.

(To know more about the deductions under section 80C, and the avenues of investment u/s 80C, please read "Saving Income Tax – Understanding Section 80C Deductions")

Tax Deducted At Source (TDS)

The income tax applicable is deducted at source. If your income is not taxable, you can provide form 15H or 15G so that no tax is deducted at source. The tax is deducted at source only if the total interest in a year is over Rs. 5,000.

Investment Limits

The minimum investment is Rs. 1,000, and the maximum allowed investment is Rs. 15 Lakhs. Any amount between Rs. 1,000 and Rs. 15 Lakhs can be invested in multiples of Rs. 1,000.

Joint Account

The account can be opened as a single account, or can be opened in joint names. The joint account holder can only be the spouse. There is no age limit applicable for the joint account holder (spouse). In case of the death of the primary account holder, the spouse can continue the account – this is subject to the condition that his / her total investment in SCSS should not exceed Rs. 15 Lakhs.

Premature / Early Withdrawal

The amount can be withdrawn before the maturity date, provided the deposit is at least 1 year old. But early withdrawal carries a penalty as follows:

• Account age between 1 and 2 years: 1.5% of the deposit amount
• Account age over 2 years: 1% of the deposit amount

Loan / Pledging

You cannot obtain a loan against the SCSS account by pledging it.

Nomination

Nomination facility is available for the Senior Citizen Savings Scheme. Names of one or more persons can be specified as nominees. Nomination can be done even after opening the account. The nomination can also be changed or canceled later. Nomination can also be done in case of joint accounts. In such cases, the joint holder is entitled to the amount in case of death of the primary account holder. The nominee(s) would have a claim only after the death of both the joint holders.

Names of Banks handling SCSS:

1. State Bank of India
2. State Bank of Hyderabad
3. State Bank of Indore
4. State Bank of Bikaner and Jaipur
5. State Bank of Patiala
6. State Bank of Saurashtra
7. State Bank of Mysore
8. State Bank of Travancore
9. Allahabad Bank
10. Bank of Baroda
11. Bank of India
12. Bank of Maharashtra
13. Canara Bank
14. Central Bank of India
15. Corporation Bank
16. Dena Bank
17. Indian Bank
18. Indian Overseas Bank
19. Punjab National Bank
20. Syndicate Bank
21. UCO Bank
22. Union Bank of India
23. United Bank of India
24. Vijaya Bank
25. ICICI Bank Ltd.

It may be noted that only designated branches of these banks have been authorized to handle SCSS, 2004.

 

Reverse Mortgage – a financial lifeline for senior citizens

Estimates show that India’s old age population will increase to 113 million by 2016, 179 million by 2026, and 218 million by 2030. Life expectancy, currently at 77 years could increase to around 80 years by 2020. With the increasing old age population and life expectancy, Reverse Mortgage introduced by Budget 2007, seems to have a potential market in India. This concept, although new in India is very popular in countries like United States, Canada and Australia, while it is in infancy in Europe and Singapore.

Reverse mortgage is a loan given to senior citizens by converting the equity in a house property into an income stream. The scheme involves the borrowers (senior citizens) pledging their house property to a lender (scheduled bank or HFC) in return for a lump sum or periodic payments spread over the borrower’s lifetime. The home owner is not obliged to repay the loan during his lifetime. On his death or leaving the house permanently, the loan is repaid along with accumulated interest, through sale of the house property. Any excess amount will be remitted to the borrower or his heirs. The lumpsum or periodic payments can be utilized by the borrower as per his needs but not for speculative purposes.

Reverse mortgage is aptly named because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to the borrower. Unlike a regular mortgage, the borrower can continue to stay in his mortgaged home during his entire life span without any fear of eviction even after the tenure expires.

Recently, National Housing Bank (NHB), a subsidiary of Reserve Bank of India (RBI), announced its final operational guidelines on reverse mortgage. Following are some of the key features of the scheme:

ü The facility will be made available to those above the age of 60 years; Joint ownership with spouse is also permitted even if one of the borrowers is below 60.

ü The scheme applies only to self-acquired and self-occupied properties, owned by senior citizens and having a residual life of atleast 20 years.

ü The amount of loan would depend on the market value of residential property, as assessed by the primary lending institution (PLI), age of borrower and prevalent interest rate.

ü The PLI should ensure that the borrower’s equity in the residential property does not fall below 10% during the tenor of the loan.

ü The borrower will not be required to pay any penalty towards prepayment of loan.

ü The lending institutions can frame their respective internal policy guidelines but the same should be fully disclosed to the potential borrowers upfront.

ü The amount received through reverse mortgage is considered as loan and not income; hence the same will not attract any tax liability.

Reverse mortgage is definitely a financial helpline for senior citizens enabling them to lead their lifestyle and meet their consumption needs without being dependent on anyone. It is the social security scheme for the benefit of senior citizens post-retirement. With very few universal old age social security schemes, reverse mortgage might have a potential market. The loan is given without any income criteria at an age where normal loans are not available. Perhaps, the most important advantage being that the borrower retains the ownership title of the house making it all the more popular among Indians who have a natural instinct for own home.

However, on the flip side, traditional joint family system, stronger bequeath motive and widespread undervaluation of real estate properties involving unaccounted money, tax evasion and benami holdings can be major deterrents for the scheme to take off.

Courtesy By: http://www.labnol.org/india/law/reverse-mortgage-a-financial-lifeline-for-senior-citizens/226/

Alzheimer's Disease in India: Alzheimer's and Related Disorders Society of India, In term of Action and creation of Mass Awarness.

Alzheimer's Disease in India: Alzheimer's and Related Disorders Society of India, In term of Action and creation of Mass Awarness.

Recreational Activities for Older People

Recreation is the employment of time in a non-profitable way, in many ways also therapeutic refreshment of one's body or mind. While leisure is more likely a form of entertainment or rest, recreation is active and participatory, but in a refreshing and diverting manner.

Recreation and Leisure Aids- Products that help elderly persons to participate in sports, social, cultural events. Includes modified sports equipment for skiing/biking/running/boating, audio description for movies, adaptive controls for video games, adaptive fishing rods, cuffs for grasping paddles or racquets, seating systems for boats, etc.

Outdoor Activities-

Fishing Aids- Vans EZ Cast, a revolutionary fishing aid for the physically challenged, who has limited arm or hand movement because of paralysis, arthritis, stroke, etc. It is works on the right or left arm of wheelchairs or lawn chairs.

Cast and reel work independently even with no wrist or finger movement. Two nylon clamps hold device to chair arm.

Golf Glove-This innovative golf glove assists a person with very poor grip in one hand to firmly hold the golf club allowing a controlled swing.

This glove assists the person with a reduced level of handgrip strength on one side to grasp a golf glove with the assistance of their other fully functioning hand. It is ideal for people who have strokes or suffer from partial hemiplegia.

Exercise: Although it may sound like more work than play, exercise can be great fun or amazing relaxation, depending on the type you choose. Try water aerobics, walking, yoga, or Tai Chi.

Indoor Activities

It is fun to make elderly relatives a part of family activities. Unfortunately the elderly sometimes miss out on family activities, or are excluded from fun events because of false beliefs and misconceptions about their age and abilities. The elderly are an important part of families and should be able to participate in family activities whenever it is possible.

Scrapbooking: Gathering your photos and mementos together in one place and build a book of decorative memories.

Collage Making:

Use old magazines, leaves, construction paper, and anything pretty to build a work of art composed of small pieces. Add family pictures and memoirs signifying family achievements to the collage. Consider framing the collage when it is completed and try to make it fit in a standard frame size.

Listen to Favorite Music:

Everyone in the family should pick some of their favorite CD's or MP3 music. Sit together as a family and take turns playing your favorite songs. Tell your family what you like about the songs. Encourage the kids to dance and also dance with the kids if you're not to shy.

Mental exercises: like solving puzzles and doing mathematical calculations mentally, without using a paper and pencil could be undertaken. This might delay the onset of serious old age diseases like Alzheimer’s or delay the progress of the disease in people already afflicted by Alzheimer’s disease.

Prakash Kumar