With development, we believe the mindset of people is also changing. Gone are those days when the boys had an upper edge over their counterpart.
In today’s era, in every walk of life, girls have matched up to boys and the boundary is drawing to the short end of the straw.
While equality between the two sexes is now improving, investing remains an area where girls continue to stay in focus for their parents.
One of the main reasons due to which the most powerful section of the society was not given importance was financial constraints.
The government has rightly taken steps towards this and has launched numerous schemes by way of which you can financially empower your girl child while saving your tax.
One such scheme is Sukanya Samriddhi Scheme. In this blog, we seek to discuss the plan in detail, its provisions and how you can put it to use for tax saving.
In this article
- About the Scheme
- Key Features of the Scheme
- Benefits of Sukanya Samriddhi Yojana
- Other Facts
About the Scheme
The Sukanya Samriddhi Yojana (SSY) is an initiative that is designed to help the girl child fulfill her education. The programme was launched in 2015 by the Prime Minister, Shri Narendra Damodardas Modi.
The scheme comes under the aegis of Beti Bachao, Beti Padhao campaign, and seeks to build a bright future for the girl child.
The scheme motivates the parents to invest in the well being of their daughter, offering incentives to all parties concerned.
Key Features of the Scheme
Some of the critical elements of Sukanya Samriddhi Yojana are mentioned below –
Parent or guardian of a girl child can invest an amount that suits their budget. Investments can range between Rs 1000 and Rs 1.5 Lakh per year.
2.Multiple Account Opening Avenues
The account for SSY can be opened either in a post office or a nationalized bank. This scheme provides with flexibility and easy account opening option.
Under the scheme, only one account is allowed for a girl child. A parent can’t open multiple accounts for the same child.
Also, a maximum number of accounts permissible in a family is two – one for each girl child. The two account limit is not applicable if twins are born after the first daughter.
4.Account Opening Age
The parents/guardian of the child can open the account until the child attains ten years of age. Once the child crosses this age, the parents are not allowed to open an account.
Maturity period for an account under SSY is 21 years after it is set up. The account holder has an option to keep the account operational even after maturity.
The operation of the account is limited to the parents and guardian until the age of 10 years. Once the child attains the age of 10 years, she can operate the account independently.
The Sukanya Samriddhi Yojana account can be opened only for Indian citizens.
Let us now talk about the benefits of the scheme.
Benefits of Sukanya Samriddhi Yojana
Some of the key benefits of the scheme are illustrated below –
The government has offered many tax incentives with an aim to catch the fancy of individuals. Following are the tax benefits
1.Parents/guardians who open the account on behalf of the girl child gets tax exemption the investment amount under section 80C of the Income Tax Act.
2.The tax benefit is provided to the girl child at the time of withdrawal of money. The entire maturity amount is exempted from tax.
3.Interest accrued is exempted from tax.
Currently, the scheme earns around 8-9% of annualized returns. This return is higher than the interest rate offered by traditional deposits.
The interest rate offered under the scheme changes. The interest rate is determined based on the decision of the government.
A provision for partial withdrawal is allowed. However, this can be utilized only when the girl child achieves 18 years of age. To add withdrawal up to 50 percent is permitted should the girl child is getting married or pursuing higher education.
Following documents are required if you wish to open an account for your daughter.
A copy of the birth certificate is required before opening the account.
The document is needed to validate the age and as-as per the scheme details the age of the girl child should be less than ten years at the time of opening of the account.
Valid identity proof of the parent/guardian is required who is opening the account on behalf of his/her daughter.
3.Proof of Residence
Proof of residency such as Ration card, voter’s ID, utility bill, etc. needs to be submitted.
These are two more imoportant facts about Sukanya Samriddhi Yojana
Under the Sukanya Samriddhi Yojana scheme, an individual can make deposits annually either in the form of a lump sum payment or through regular investments over time.
Sukanya Samriddhi Yojana account is transferable from one post office to a bank after filling the form.
Disclaimer: The views expressed in this post are that of the author and not those of Groww