Tax benefits through Sukanya Samriddhi Yojana

What is Sukanya Samriddhi Yojana?
 

A general gender disparity has prevailed in the country for years and has made it crucial for the government to take coercive steps against societal gender barriers. Sukanya Samriddhi Yojana aims to bring financial welfare to every girl child in the country. The scheme is available for every parent who has a girl child below the age of 10 years, and it ensures that a sufficient corpus is provided to take care of the girl child’s education and other expenses.¹

Understanding the eligibility and application process
 

Parents must know the eligibility criteria, process, and prerequisites to avail of benefits under the Sukanya Samriddhi Yojana.

 

1. Girl child age
    

   Any girl child who is under the age of 10 years and residing in any part of India is eligible for the SSY scheme.¹
    

2. Sukanya Samriddhi Yojana account
    

   To avail of the benefits, the parent has to open an SSY account by visiting the nearest post office or any authorised bank.
    

3. Deposits in the SSY account
   
   

   To open an SSY account, a minimum deposit of ₹250 is required. Post the first deposit, any amount up to ₹1,50,000 in the multiple of 50 can be deposited in one financial year for the next 15 years.¹
    

4. Sukanya Samriddhi Yojana account handling
   
   

   The SSY account can be operated by the parent/guardian till the time the girl child attains majority, i.e. 18 years of age. After that, the account shall be operated by the girl child.¹
    

5. The application process of Sukanya Samriddhi Yojana
   
   

   To open a Sukanya Samriddhi Yojana account, here are the steps that you need to follow: ¹

• Visit the nearest authorised post office or any authorised commercial bank where you want to open the account.
• Fill in the application form (Form 1) with all the required personal details.
• Submit the form along with a minimum deposit of ₹250 or any amount up to ₹1,50,000 in the multiples of 50
• Your request will be processed by the bank, and a Sukanya Samriddhi Yojana Account will be opened
• Make sure to collect the bank account documents, including the passbook.

 

Sukanya Samriddhi Yojana tax benefits and more
 

Before applying for the scheme, every parent must be well informed about the benefits of Sukanya Samriddhi Yojana. Here are some of the benefits of SYY:¹

 

1. Interest on deposit
    

   Sukanya Samriddhi Yojana comes with interest rates that can be enjoyed on the deposited amount. For the second quarter of the financial year 2024-2025, a compounded interest of 8.2% per annum was applicable. This makes the scheme one of the most attractive small savings schemes in terms of interest paid.¹

   Note: There are certain conditions after which the interest rate is not paid:¹

   • The girl child becomes a non-resident of India or a non-Indian citizen
   • The 21-year maturity period has lapsed.
   • Any deposit made above the maximum limit of ₹1,50,000 will not earn any interest and can be withdrawn anytime too.
      

2. Tax benefits
    

   SSY is one of the schemes that comes with triple E benefits. You can avail of Sukanya Samriddhi tax benefits u/s 80C (in case of old tax regime) and 10 of the Income Tax Act, 1961. Here’s how the government is promoting investment under the scheme by offering: ¹

   • You can get SSY tax benefits under Section 80C (in the case of old tax regime). You can get a deduction of up to ₹1,50,000 every financial year for the investments you make ¹
   • The proceeds received on maturity are also exempted from tax liabilities.
   • The interest rates that you receive under the SYY account are also exempted from tax liabilities under Section 10 of the Income Tax Act, 1961.
      

3. Low minimum deposit
    

   Opening an SSY account does not require any hefty deposit and makes it accessible for parents from all social groups. A minimum deposit of only ₹250 is required in every financial year.¹
    

4. Withdrawal
    

   Withdrawal of SSY is allowed after 21 years of account opening. For withdrawal, duly filled Form 3 along with the SSY passbook are to be submitted at the post office/ bank office where the account is being maintained.
   
   Under Sukanya Samriddhi Yojana, a partial withdrawal is also allowed. For any partial withdrawal, there are two conditions: ¹

   • The girl child must have attained adulthood i.e. 18 years of age or she has cleared her 10th standard
   • Only 50% of partial withdrawal is allowed.

   
   Note: A partial premature withdrawal is allowed only when the child turns 18 years old or for her higher education or her marriage.¹
    

5. Long tenure
    

   The maturity period under the SSY scheme is carefully planned to ensure that the maturity amount is used strictly for the girl child. While you need to invest only for 15 years from the date of investment, the maturity period is 21 years.  Withdrawal may be allowed when the girl child attains the age of 18 years and is subject to the conditions of the scheme. ¹
    

6. Guaranteed returns
    

   Sukanya Samriddhi Yojana is a government-backed scheme that promises returns on maturity. However, it is advised to check the rate of interest to know the expected returns.¹

    

Wrapping Up

 

The Sukanya Samriddhi Yojana is designed to help parents secure a bright and prosperous future for their daughters. Designed to support her future dreams, it’s also an excellent tax-saving tool for parents. Open an SSY account in your daughter’s name before she turns 10, and watch your savings grow into a fund that can cover her college education or wedding expenses with ease and avail of the Sukanya Samriddhi Yojana tax benefits as well.

 

FAQs

 

How many years do you need to pay for Sukanya Samriddhi Yojana?
 

Sukanya Samriddhi Yojana offers a maturity benefit after the girl child turns 21 years old. You need to contribute a minimum of ₹250 for the first 15 years only.¹

Can I withdraw money from the Sukanya Samriddhi Yojana?
 

Once the girl child turns 21m the SSY will mature and the money can be withdrawn. However, withdrawal of 50% of the balance available is allowed under the following conditions:

• The girl child must have attained adulthood, i.e. 18 years of age or she has cleared her 10th standard.
• The money should be for the girl’s marriage or her higher education.¹
   

What is the minimum and maximum investment amount for SSY?
 

A minimum deposit of only ₹250 is required to be made every financial year. After that, any amount in the multiple of 50 can be deposited. The maximum deposit amount allowed is ₹1,50,000 in one financial year. ¹