Sukanya Samriddhi Yojana: Benefits, Eligibility, How to Apply and How Much Tax You Can Save

Synopsis: This article explains in detail the Sukanya Samriddhi Yojana, which is a Government of India savings scheme aimed at securing the financial future of the girl child. The article covers the key features and benefits of the scheme, eligibility, and tax benefits. 

Sukanya Samriddhi Yojana (SSY) is a savings scheme launched by the Government of India to encourage parents to build a secure financial future for their girl child. The scheme focuses on long-term savings and offers tax benefits. This scheme is available via authorised banks and post offices across the nation.

Benefits of Sukanya Samriddhi Yojana (SSY)

• Offers high returns. (SSY currently offers an interest rate of 8.2% per annum, subject to quarterly revision.)
• Eligible for tax deduction under Section 80C
• Long-term financial security and empowerment of the girl child
• Backed by the Government of India
• The maturity amount is fully tax-free

Note: A Tax paying individual can save up to ₹1.5 Lakh under 80C by investing in SSY

Deposit Rules

• Minimum deposit amount: ₹250 p.a
• Maximum deposit amount: ₹1.5 lakh p.a
• Maturity Period: 21 years from the date of account opening
• The interest rate is revised by Govt every quarter
• Deposits must be made for the first 15 years.
• Deposit Method: Cash, cheque, DD, or online transfer.

For Example, if 60,000 is deposited every year for at least 15 years into the SSY scheme, in 21 years, at an interest rate of 8% (assuming), you’ll have a corpus of nearly 28 lakhs.  Furthermore, you can claim a tax deduction of 60,000 every year under Section 80C, and additionally, the principal amount and interest accrued are tax-free. This makes SSY an ideal scheme for girl child parents who want to give their child financial security.

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Eligibility Criteria

• Parents or legal guardians can open an account under SSY for a girl child of age less than or equal to 10.
• SSY is available only to Indian citizens.
• Only one account is allowed per girl child under the SSY.
• The scheme requires the consent of the parent or legal guardian to open an account on behalf of the girl child. 
• The parent or guardian will act as the account operator until the girl child reaches the age of 18 years.
• The account should be operated by the girl once she is 18 years of age.

Premature Closure of Account

The SSY account can only be closed under the following situations

• Marriage: If the girl gets married legally, i.e after the age of 18 years.
• Death: If the girl child dies, on submission of the death certificate, the balance will be paid to the guardian.
• Medical Emergencies: If the girl child or the guardian faces medical emergencies.
• Other reasons: If the account is closed for other reasons, the account will earn interest at a lower rate. 

Pre-Maturity Withdrawal Rules

• Withdrawal limit: 50% of the account balance
• Purpose: Educational or marriage purposes.
• Age limit: Child has passed 10th grade or is 18 years of age
• Withdrawals can be made in a lump sum or in installments
• Documents showing the expenses for the purpose 
• The withdrawal amount cannot exceed the expense of the purpose.

Default Rules

• If the minimum amount is not deposited for the year, then the account will be considered inactive.
• To reactivate the account, an amount of INR50 should be paid as a penalty p.a, along with the minimum deposit amount for each defaulting year.

Documents to Submit

• Birth certificate of the girl child
• Identity/Address proof of the guardian
• Medical certificate
• KYC documents such as Aadhaar, Voter ID

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How to apply for Sukanya Samriddhi Yojana

You can’t open a SSY account directly online. You must visit a bank or post office to open an account.

1. Visit the bank or post office branch.
2. Fill the application form and provide supporting documents.
3. Pay the first deposit.
4. The bank or post office will process the application.
5. Upon processing, your SSY account will be created.
6. A passbook will be issued once the account is created.

Conclusion

Sukanya Samriddhi Yojana is a reliable savings scheme designed to help parents secure the long-term financial future of their girl child. With attractive government-notified interest rates, tax-free returns, and eligibility for deductions under Section 80C, SSY stands out as one of the most beneficial small savings schemes available in India. For parents seeking a safe and tax-efficient investment option, the Sukanya Samriddhi Yojana serves as an effective tool to build a strong financial foundation for their daughter’s future.

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Written by Nila Maria Jacob