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Sukanya Samriddhi Yojana (SSY)-Income Tax Benefits, Interest Rate 2023

Updated on: 31 May, 2023 03:42 PM

‘Save girls, educate the girl child,’ a message by the Beti Bachao Beti Padhao (BBBP) campaign, works on the empowerment of the girl child. Another addition to this aim of empowering the girl child is Sukanya Samriddhi Yojana.

The Sukanya Samriddhi Yojana scheme currently offers an 8% per annum interest rate.

What is Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana is a scheme backed by the government and launched by our honorable prime minister that focuses on the economic welfare of the girl child. This scheme 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 features of the Sukanya Samriddhi Yojana Account?

Salient Features of Sukanya Samriddhi Yojana
Interest Rate 8% (Q1 FY 2023-24)
Eligibility criteria The SSY account is opened after the birth of the girl child but before she turns 10th year in age.
Minimum and Maximum Investment Rs. 250-Minimum and Rs. 1.5 lakh-Maximum (per annum)
Salient Features of Sukanya Samriddhi Yojana
Maturity Period The lock-in duration of SSY account is of 21 years from the date of opening

Sukanya Samriddhi Yojana serves two purposes-Welfare of the girl child and a tax saving investment. Let us discuss the Sukanya Samriddhi Yojana as a tax-saving instrument.Read more about Sukanya Samriddhi Yojana.

Sukanya Samriddhi Yojana Eligibility

  • Only parents or legal guardians of a girl child can open an SSY account
  • The girl child has to be below the age of 10 at the time of account opening
  • Only one account can be opened in the name of a girl child
  • Only two SSY accounts are allowed for a family i.e. one for each girl child

Note: Sukanya Samriddhi Account can be opened for more than two girls in some special cases which are-

  • If a girl child is born before the birth of twin or triplet girls or if triplets are born at first, then a third account can be opened
  • If a girl child is born after the birth of twin or triplet girls, a third SSY account cannot be opened

What are the tax benefits of Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana is a reliable investment choice that offers huge tax benefits. This scheme comes under the EEE format, i.e., Exempt-Exempt=Exempt. Tax benefits ensure that investing in the SSY scheme doesn’t burden a family's wallet. Following tax benefits are provided to those enrolled in the SSY scheme:-

  • Sukanya Samriddhi Yojana qualifies for exemptions up to Rs. 1.5 lakh under Section 80C of the Income Tax Act.
  • The interest accrued on the maturity of the deposit is tax-free. The interest is compounded annually.
  • The lock-in period for the SSY scheme is 21 years starting from the opening date, and after the maturity, the amount invested can be withdrawn, which is tax-free.

What are the eligibility criteria for tax deduction?

SSY account can be opened only in the name of a girl child before she reaches the age of 10 years. Then, the parents or guardians of the girl child can start a Sukanya Samriddhi Yojana Account on behalf of their girl. Only one depositor can claim the tax deductions towards this scheme under Section 80C of the Income Tax Act.

If you are planning to invest in Sukanaya Samriddhi Yojana you can use the “Sukanaya Samrddhi Calculator” which will help you in

  • Calculation of the returns on the amount invested every year.
  • The total amount that you will receive at the time of maturity.
  • Date of Maturity (Approx).

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- From where can I open an SSY Account?

You can open an SSY Account from any nearby post office or bank.

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- Can I invest more than 1.5 lakhs in Sukanya Samriddhi Yojana?

The minimum amount to contribute is Rs.250, and the maximum is Rs. 1.5 lakh.

Q- Are both parents allowed to claim the tax benefit of the Sukanya Samriddhi Yojana?

No, only one parent can open the account in the girl's name, and that contributor can only claim the benefits.

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

Then, the entire amount is given to the family or the girl child. Also, the other way around is to continue the scheme with the same deposit amount until the maturity period. Once the girl attains age 21, 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 authorized bank to another.

Sukanya samridhi Yojana account

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 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.