When you can open Senior Citizen Savings Scheme before reaching 60

I have taken early retirement on 31.12.2020 at 56. I had received part of my retirement dues at that time. My company has a private Provident Fund trust. I have received Rs. 25 lakhs on 5th of June, 2021 being my Provident Fund (PF) due from the company. Can I deposit Rs. 15 lakhs out of this PF dues in Senior Citizen Saving Scheme though I have to yet complete 60 years of age as I am told that those who retire early can open account under this scheme?-S Shah

As per the Senior Citizen Saving Scheme 2019 any person who has completed 60 years of age can open an account deposit upto Rs. 15 lakhs under Senior Citizen Saving Scheme. Any person who has completed age of 60 years whether salaried or self-employed can open account under this scheme with money received from any source. The deposits under this scheme can be made either in a single account or in multiple accounts but aggregate amount of all deposit under this scheme cannot exceed Rs. 15 lakhs at any given point of time.

The scheme makes exception in the case of a person, who has either taken early retirement or has retired on reaching the age of superannuation, who can open account under this scheme any time after 55 years of age even before completion of the threshold age of 60 years. Such persons can open account under this scheme only with their retirement benefits that too within one month from the date of receipt of retirement benefits. Please note that the restriction of one month is counted from the date of receipt of retirement benefits not from the date of retirement. So though you retired in December 2020 but since your Provident Fund dues, which are treated as retirement benefits, are received only on 5th June 2021, you can deposit full 15 lakhs under this scheme within one month i.e. by 4th of July 2021. While opening the account under this scheme you will have to furnish proof of date of disbursement of your provident fund due with the bank account where the same have been deposited along with a certificate from your employer about your employment retirement benefits.

Balwant Jain is a tax investment expert. He can be reached at [email protected]

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