Which of the following statement is/are INCORRECT about the announcement made by Central Government in November 2023 regarding modification to Senior Citizen's Savings Scheme?
1. The amended Senior Citizen's Savings (Fourth Amendment) Scheme, 2023, now allows depositors to extend their accounts multiple times upon maturity to benefit from its attractive interest rates for a shorter period.
2. The ministry has also amended the rules to not to allow premature closure of PPF account and changed the rules governing premature withdrawal under the National Savings Time Deposit scheme.
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Correct option is B

The correct answer is (b) 2 only

Explanation:

Statement 1:

“The amended Senior Citizens' Savings (Fourth Amendment) Scheme, 2023, now allows depositors to extend their accounts multiple times upon maturity to benefit from its attractive interest rates for a shorter period.”

• Correct: As per the Senior Citizen's Savings (Fourth Amendment) Scheme, 2023, account holders can now extend their SCSS accounts multiple times in blocks of three years each upon maturity. Previously, only a single extension was permitted. This change provides senior citizens with greater flexibility to continue earning attractive interest rates. ​

Statement 2:

“The ministry has also amended the rules to not to allow premature closure of PPF account and changed the rules governing premature withdrawal under the National Savings Time Deposit scheme.”

• Incorrect: The statement is inaccurate. The ministry did not prohibit premature closure of PPF accounts. Instead, it amended the interest calculation for premature closures. Now, if a PPF account is closed prematurely, the interest rate will be reduced by 1% from the rate at which interest has been credited since the date of opening or from the commencement of the current block period of five years. ​

Regarding the National Savings Time Deposit Scheme, the rules were amended to allow premature withdrawals under specific conditions. For instance, a five-year time deposit can be closed after four years, but the interest payable will be at the rate applicable to the Post Office Savings Account, which is lower than the original rate. ​

Senior Citizen Savings Scheme (SCSS)

Objective:
To provide regular income to senior citizens post-retirement.

Eligibility:

• Indian citizens aged 60 years and above.
• Retirees aged 55–60 years who have opted for the Voluntary Retirement Scheme (VRS) or superannuation.
• Retired defence personnel aged 50–60 years.

Key Features:

• Maturity Period: 5 years (extendable by 3 more years).
• Number of Accounts:
• Multiple accounts allowed.
• Can be held individually or jointly with a spouse.
• Deposit Limits:
• Minimum: ₹1,000 (in multiples thereof).
• Maximum: ₹30 lakh (lump sum only).
• Interest Payment:
• Interest is paid quarterly.
• Premature Withdrawal:
• Allowed after 1 year of account opening (with applicable penalties).
• Tax Benefits:
• Eligible for deduction under Section 80C of the Income Tax Act.