Senior citizen couples can earn ₹40,000 per month tax-free from SCSS. Here’s how

Are you a senior citizen couple with a total annual income of less than ₹12 lakh each, looking to invest your corpus to earn a stable and decent income? You may be surprised that together, you can earn around ₹40,000 per month or ₹4.8 lakh annually tax free under the new tax regime by investing in the government-backed Senior Citizen Savings Scheme (SCSS).

Here’s the calculation showing the return for a senior citizen couple:

For a senior citizen couple to earn a monthly interest pay-out of ₹40,000, the initial investment required can be computed as below:

Currently, the scheme offers 8.2% per annum interest rate, and senior citizen couples can open separate SCSS accounts.

So, for earning ₹4.8 lakh per annum, the senior couple would be required to make an initial investment of ₹58.54 lakh.

This is computed by dividing the targeted annual interest/ rate of interest.

In the present scenario, senior citizens are allowed to make a maximum investment of ₹30 lakh per person. The limit was raised from the earlier cap of ₹15 lakh in the Union Budget 2023, offering senior citizens more room to make steady returns.

Considering the limit, the required investment amount can be distributed between the couple as ₹29.27 lakh each.

Taking the total investment into account, the couple would be able to earn a combined quarterly interest of ₹1.2 lakh, which works up to ₹40,000 per month. Individually, each would earn ₹2,40,000 annually (₹20,000/month) from their respective SCSS accounts.

As per Budget 2025 announcement, income up to ₹12 lakh per individual is tax-free under the new tax regime. Now, supposing the couple's total income is well below the threshold of ₹12 lakh, including the SCSS interest, the couple will have zero tax liability.

Furthermore, with respect to TDS, although the limit has been increased to ₹1 lakh from the earlier specified threshold of ₹50,000, each senior citizens in this case is unlikely to face TDS deduction if they submit Form 15H, as their individual income remains below the basic exemption limit of ₹4 lakh under the new tax regime.

So, with an initial investment of ₹29.27 lakh per person, a senior citizen couple can easily earn a ₹40,000 per month interest tax-free under the new tax regime. But this is provided their individual total incomes stay under ₹12 lakh.