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What is Sukanya Samriddhi Yojana?

Updated on: 22 Dec, 2022 04:49 PM

Sukanya Samriddhi Yojana, or SSY, which translates to the Girl Child Prosperity Scheme’ complies with the government’s “Beti Bachao, Beti Padhao” campaign. Dhanlakshmi Scheme’, ‘Ladli Scheme’ was some other schemes launched under Beti Bachao Beti Padhao Yojana.

Launched by Prime Minister Narendra Modi, the idea of Sukanya Samriddhi Yojana comes after observing the declining girl-child ratio in the country. This Yojana is created to ensure the betterment of girl children in our country.

Sukanya Samriddhi Yojana, a dream project of our honorable prime minister, serves two purposes-Welfare of the girl child and a tax saving investment.

What is Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana is a saving scheme by the Government of India that aims to tackle two serious issues related to the girl child in India- one is Education and the other is Marriage. Under this scheme, the parent or guardian can open an account (Sukanya Samriddhi Account) for their girl child of ten years or younger.

Sukanya Samriddhi Yojana helps parents to save for their little girl from the time they are born. In Sukanya Samriddhi Yojana, the minimum deposit amount is 250/- (which was Rs.1000 before 5 July 2018), and the maximum deposit ₹ 1.5 Lakh in a financial year.

These small deposits help create an adequate amount for the little girl's bright future. The account can be opened at any post office or authorized commercial bank. The investment tenure under Sukanya Samriddhi Yojana is 21 years, starting from the opening date.


What are the benefits of Sukanya Samriddhi Yojana?

Interest:

  1. Sukanya Samriddhi Account provides 7.6% interest, which is higher than other saving plans.
  2. Sukanya Samriddhi Yojana helps make your daughter financially independent by directly providing the accumulated interest and account balance to the policyholder or the girl child.
  3. The savings keep accumulating to add compound interest even after maturity until the account holder completely closes the SSY account.

Transfer of account

  1. The Sukanya Samriddhi Account can be transferred as per location from one Post office/Bank to another anywhere in India.

Interest Compounding

  1. The interest accrued from the maturity of the deposit is tax-free. The interest is compounded annually.
  2. Sukanya Samriddhi Yojana comes with the exempt-exempt-exempt (EEE) status because of the tax benefits.
  3. Under Section 80C of the Income Tax Act, deposits are eligible for deductions subject to the maximum cap of Rs.1,50,000.

Returns:

  1. Being a government-backed scheme, Sukanya Samriddhi Yojana offers guarantees of returns on maturity.

What are the eligibility criteria to open the Sukanya Samriddhi Yojana Account?

  • The parent or legal guardian can open the SSY account on behalf of the girl child.
  • The little girl must be a citizen of India.
  • Two accounts can be opened for two girls within the family.
  • If a family has twin girls, a third SSY account can be opened for the third girl.

What is Sukanya Samriddhi Yojana Account Rules?

  • To open the Sukanya Samriddhi Yojana Account, there is a list of documents required:-Duly filled registration SSY form, birth certificate of the girl child, Identity proof, and residential proof of the depositor.
  • Once the parent, guardian, or the girl child provides proof of a change of residence, the account can be transferred to any location in India.
  • The deposits for the investment in Sukanya Samriddhi Yojana can be done through post offices and authorized bank branches. The establishment of IPPB (India Post Payment Bank) also offers online transactions; all you have to do is visit the nearest post office once for registration. Later, you can carry on all the transactions, transfer the account, view the balance, etc., online.
  • If there are three daughters in a family, the maximum number of accounts to be opened is two.
  • The deposit matures 21 years from the opening date, after which the girl child can fulfill her dreams of higher education, starting a business, or marriage through this accumulated amount.
  • 50% of the balance can be withdrawn to meet educational expenses once the girl child turns 18. Proof of admission must be provided.
  • If the deposit is not made every year, the account will fall under default, and to reactivate the Sukanya Samriddhi Account, a fine of Rs.50 per year needs to be deposited.

What are the tax benefits of the Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana scheme is eligible for tax deductions under section 80C. Similar to other tax saving options like, EPF, PPF, and ELSS, this scheme offers high-tax returns and comes under Exemption-Exemption-Exemption status.

For instance, if you are saving Rs 1 lakh into your daughter’s Sukanya Samriddhi Account during a given financial year. This amount will get deducted from your taxable income while filing tax returns at the end of the year.


What is Sukanya Samriddhi Yojana Calculator, and How does it work?

Once you plan to invest in Sukanya Samriddhi Yojana, the Sukanya Samriddhi Yojana calculator can calculate the final amount upon maturity. This calculator helps estimate the amount you can save for your daughter’s higher education or marriage through the SSY scheme. Tax2win introduces Sukanya Samriddhi Yojana Calculator wherein you can verify the total amount invested to date and the corresponding returns.

The formula for calculating the interest earned on an SSY account is as follows:
A = P (1+r/n)^nt
Where, P = Initial Deposit
r = Rate of interest
n = count of years the interest compounds
t = Number of years
A = Amount at maturity

Sukanya Samriddhi Calculator first asks you to provide your daughter's age and the investment amount to deposit in the scheme. Then, the calculator will give the estimated value to be received at maturity based on the amount you entered. In addition, the Sukanya Samriddhi Yojana calculator allows you to check the record of the monthly amount invested in the scheme.

Once all formalities are done, you can check the record of all your transactions in the Sukanya Samriddhi Account Passbook.


What are Sukanya Samriddhi Yojana Withdrawal Rules?

  • The interest accrued along with the balance is paid to the child when the account matures, i.e., on the completion of 21 years. The following documents need to be provided at the time of withdrawal:-
    1. SSY withdrawal application
    2. Proof of age
    3. Proof of identity
    4. Proof of citizenship and residence
  • Sukanya Samriddhi Account can be discontinued before maturity in cases where the girl gets married after attaining the age of 18 years.
  • Premature closure of the SSY account is allowed only when the marriage of the girl is planned and notified a month before the marriage or up to 3 months after the wedding.
  • Premature withdrawal can also be made after five years in cases where because of any reason parents or guardian (the depositor) of the girl dies. This mishappening can cause a financial burden on the girl to maintain the account.

Sukanya Samriddhi Yojana

Please feel free to call us at +91 9660996655 or write at [email protected] for queries related to Income Tax, and our experts will be in touch with you.


Frequently Asked Questions

Q- What is the limit to which taxation is exempted under the SSY scheme?

The limit is Rs.1,50,000, up to which the tax is exempted under Section 80C.


Q- Who can open a Sukanya Samriddhi Account?

The parents or guardians of the girl child can start a Sukanya Samriddhi Account on behalf of their girl.


Q- What happens to the amount where the depositor (guardian or parent of the girl child) dies?

The entire amount is given to the family or the girl child. Also, the other way round is to continue the scheme with the same deposit amount until the maturity period. Once the girl attains the age of 21 years, the deposit amount and interest can be handed over.


Q- Can the Sukanya samridhi Yojana account be moved as per location?

Yes, the scheme can be transferred from the post office to the bank or from one bank to another.


Q- What happens if I miss depositing the minimum amount in the Sukanya Samriddhi Account annually?

In such cases, the SSY account gets deactivated, and a penalty fee of Rs.50 is fined for retrieving the account along with the original minimum amount of Rs.250.


Q- What minimum and maximum amount can be deposited under the Sukanya Samriddhi Scheme?

The minimum amount is Rs.250 per annum, and the maximum is Rs.1.5 lakh per annum.


Q- Can my regular bank account be converted to Sukanya Samriddhi Account?

No, this scheme and its account are created especially for a girl child to uplift her financial status in the country.


Q- Can NRIs be a part of the Sukanya Samriddhi Scheme?

The girl should be a citizen of India.


CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

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