New Delhi: The Government on Wednesday clarified that the Senior Citizens Savings Scheme that gives 9 per cent interest rates on investments up to Rs. 15 lakh, is taxable and that tax would be deducted at source for elderly people who came under the tax net.
Senior citizens beyond 65 years of age and having no taxable income can fill up form 15H, Finance Ministry sources said. Those who are between 55 and 65 years would have to fill up form 15J in case they do not have taxable income. For others, tax will be deducted at source on interest income. The tax rate at 10 per cent is raised to 10.2 per cent due to education cess. Those with income beyond Rs. 10 lakh a year will also pay 10 per cent surcharge, increasing their tax liability on interest income to 11.22 per cent.