What is Sukanya Samriddhi Yojana?
The government took different actions for education and financial freedom of the girl child. The Indian Government has launched Sukanya Samridhi Yojana (SSY) scheme that supports parents to save the girl’s education and marriage from the very beginning. Sukanya Samriddhi Yojana is a small savings system that can be opened in post offices as well as public and private banks in the form of a baby girl’s savings account.
Who can apply for SSY Scheme?
Only a Sukanya Samriddhi Yojana account can be opened for the girl child by parents and legal guardians.
- At the point of opening an account, the child should be under 10 years old. The account is operational until the girl is 21 years old.
- In the case of initial investment, the multiple deposits of Rs. 100 growing from Rs. 250 and the maximum amount of Rs. 1,50,000 each year.
- There are no multiple accounts for one single girl child.
- Only two Sukanya Samriddhi Yojana accounts are approved per household, one for each child.
- Higher interest rates paid by a company with a fixed deposit are permitted.
Key Benefits of SSY Scheme:
Individuals can experience the major benefits of the SSY scheme as mentioned below:
- According to Section 80C of the Revenue Tax Act, 1961, the tax benefits for the contributions to the scheme are given up to Rs.1.5 lakh.
- The amount of interest generated is also tax-free.
- Tax benefits for the maturity or withdrawal amount are often provided.
Economic Features of SSY Account:
- 4 percent enticing, the tax-free interest rate under section 80C.
- Investment in a single financial year is allowed for a nominal Rs. 1,000
- Major investment Rs. 1,50,000 in one financial year
- In the case of non-depositary Rs. 1000/-total, a tax of Rs. 50/-shall be imposed
- Account deposits may be made until 14 years, from the start of the account
- The account is closed after a term of twenty-one years from the date it was opened if a marriage of the account owner happens prior to the expiration of that span of 21 years, the account is not allowed to operate after the date of the marriage.
- Individuals also get passbook.
Process to Open:
Complete the details in the opening form for SSY
- Maintain documents ready, along with photographs
- Pay deposit amount (any amount between Rs. 250 and 1.5 lakh will be paid)
- Please give standing instructions at the branch or set SSY account credit automatically via NetBanking.
Interest Rates
The SSY scheme ensures an interest rate of 8.5% p.a. And on an annual basis, it’s multiplied. Tax is not charged when the scheme is over or a non-resident Indian (NRI) girl or non-citizen. The government determines the interest rate and is quarterly determined.
Tax Benefits under SSY Scheme
Eligible for tax deduction up to Rs 1.5 lakh towards this SSY scheme.
- The interest credited is tax-free.
- The withdrawal of investment amount within maturity level is exempt from tax.