In 2015, Prime Minister Narendra Modi launched the famous ‘Beti Bachao Beti Padhao’ campaign in an attempt to secure the welfare of the girl child – to protect and educate her. In tune with the campaign, he also launched the Sukanya Samriddhi Yojana – a savings scheme designed to give the girl child the necessary means to lead a financially independent life. While the scheme has become rather popular in India, there are a few things that most people do not know about this scheme.
Here are some things you may not know.
Basic Details of the scheme
Under the Sukanya Samriddhi Scheme, parents and legal guardians of girls up to the age of 10 years, can open an account and invest anywhere between ₹250 to ₹150,000 per annum. Accounts can be opened right from the time the girl child is born until she turns ten years old. The parents or guardian can deposit sums in the account for a maximum duration of 15 years, but the account matures when the girl gets married (after the age of 18 years) or when she turns 21 years old.
Withdrawing money from the account
The sums deposited in the SSY account may be partially withdrawn (up to 50%) after the girl turns 18, to finance her higher education. Money can also be withdrawn to fund the girl’s marriage. However, she needs to be of legal age (i.e. 18 years and above) at the time of her marriage. It is also important to note that the girl (who must be named the primary account holder) can alone withdraw funds from the account. The parents or legal guardians may serve as joint account holders when the girl is still a minor but are not permitted to make any withdrawals.
Tax benefits
The Sukanya Samriddhi Yojana also offers tax benefits to the depositors. Investing parents and guardians can avail tax deductions of ₹150,000 per annum under Section 80C of the Income Tax Act of 1961. Investments under this scheme are designated as EEE or Exempt, Exempt, Exempt, which means that the investor does not have to pay any taxes on the principal amount deposited, the interest earned on the deposits and the total amount at maturity.
Closing the account due to the account holder’s untimely death
In the event of the unfortunate death of the girl, her parents can close the SSY account and claim the amounts deposited along with interest accrued. The sums are handed over to the nominee registered after the parents/guardians have submitted the death certificate and other necessary documents.
Closing the account due to the Inability to continue investing
The government also permits depositors to close the account if they are unable to deposit the necessary sums due to their financial conditions. However, contributors must be able to prove the financial stress they are undergoing and seek the required permission from competent authorities and follow the due process to close and settle the account.
Final word: If you wish to secure your daughter’s future, you must consider investing the Sukanya Scheme and gifting her with a sense of financial independence. You can open a savings account under the Sukanya Samriddhi Yojana Online or visit any participating bank or post office in India.
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