A special savings scheme for senior citizens, offering a high 9.0 per cent return, is likely to be launched on August 1.

Indicating this, top finance ministry sources said that the Senior Citizen Savings Scheme would have an upper investment ceiling of Rs 15 lakh (Rs 1.5 million) to ensure it does not become an instrument for misuse by the high income groups.

The scheme, which would be by way of bonds, would be available for persons above 60 years, the sources said.

Although the scheme, providing an attractive return, is taxable, sources said not many would come under the tax bracket if they do not have other income as the Income Tax exemption has been raised to Rs 100,000 in the budget.

The savings scheme was announced in the budget by Finance Minister P Chidambaram to provide a cushion to the elderly who have been hit by falling interest rate regime in the country.