|Sukanya Samriddhi Account: New scheme for a Girl Child In India|
TAX TALK-22.08.2016-THE HITAVADA
CA. NARESH JAKHOTIA
Sukanya Samriddhi Account: New scheme for a Girl Child In India
I have some queries regarding Sukanya Samriddhi Yojna (SSY). I have opened it in the month of March-2015 an account in SSA in post office with my Grand Daughter aged 3 ½ years old. I have also deposited Rs. 1.50 lakh in FY 2015-16 for saving for a child's future goals (education & marriage purpose). I am a retired person getting pension. As per scheme, SSY account can be opened by the parent or guardian in the name of girl child not more than 10 yrs old. I am a natural guardian of my Grand Daughter. Please suggest me, should I take the benefit of section 80C? [firstname.lastname@example.org]
Opinion:“Courage, sacrifice, determination, commitment, toughness, heart, talent, guts. That's what little girls are made of” - Bethany Hamilton
About Sukanya Samriddhi Yojana (SSY)Launched as a part of the ‘Beti Bachao Beti Padhao’ campaign of the central Government, Sukanya Samriddhi Yojana (SSY) envisages financial security for Girl child. SSY is one of the most attractive & safe debt schemes when it comes to saving for a girl child. It has sparked considerable interest due to the tax benefit and higher interest rate via a vis Public Provident Fund.
The account can be opened by the parent or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of 10 years. A depositor can open and operate only one account in the name of a girl child under the scheme. For one girl, only one account is possible. Natural or legal guardian of a girl child can be allowed to open the account for two girl children only. The third account in the name of the girl child can be opened in the event of birth of twin girls, as second birth or if the first birth itself results into three girl children. This account can also be opened for adopted daughters.
Where to open Account:
Sukanya Samriddhi account can be opened in Post Offices or authorized Banks (SBI, PNB, BOB, BOI, Canara Bank, Andhra Bank, UCO Bank, and Allahabad Bank, to name the few).
FeaturesMinimum Rs. 1,000/- can be invested in one financial year. Maximum investment of Rs. 1,50,000/- can be made in one financial year. Any excess amount deposited will not earn any interest & such excess amount can be withdrawn anytime. Deposits in an account can be made till completion of 15 years, from the date of opening of the account. The account shall mature on completion of 21 years. The girl child strictly has to be an Indian resident throughout the tenure of the scheme. In case if the residency status of the girl child changes in the interim, no interest shall be payable from the date of change and the account will be closed prematurely.
Interest Rate:The SSY offers 75 basis points (bps) higher than the 10-year government bond as against 25 bps by the PPF. Presently, it is offering attractive interest rate of 8.60%. Interest rate is regulated by Ministry of Finance from time to time & can be reset every quarter, similar to other small savings scheme. For the purpose of interest computation every month, the lowest account balance between 10th and the end of the month will be considered. In effect, the amount deposited after the 10th will not earn any interest for that month. The interest will be compounded yearly and directly credited to the account.
Investment in Sukanya Samriddhi Yojana scheme is eligible for deduction under section 80C of the Income Tax Act. The scheme operates under E-E-E Model i.e., Principal, interest and withdrawals all are exempt from income tax. Even if the taxpayer is fully utilizing the limit of deduction u/s 80C as a result of investment in LIC/PPF/NSC/Housing loan repayment, still taxpayer can opt for investment in SSY as the interest received is higher & tax free also.