The maximum investment limit is currently ₹30 lakh per individual, and the interest, unlike PPF or SSY, is fully taxable at your income slab rate — though TDS is only deducted if the total interest across the financial year crosses a specified threshold, and Form 15H can help senior citizens avoid unnecessary deduction if their income doesn't require it.
The scheme has a 5-year tenure, extendable once by 3 more years, and while premature withdrawal is allowed, it comes with a penalty that reduces depending on how early the withdrawal happens relative to the tenure.
For a retiree prioritising a predictable, government-guaranteed quarterly income stream over growth, SCSS is a strong core holding — particularly useful alongside PPF or an NPS annuity to build a diversified, low-risk income base rather than relying on any single source for retirement cash flow.