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Sukanya Samriddhi Yojana (SSY): Features, Interest Rates, and Tax Benefits

by | Jun 19, 2024 | Income Tax | 0 comments

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Sukanya Samriddhi Yojana (SSY): Features, Interest Rates, and Tax Benefits

Sukanya Samriddhi Yojana (SSY) is a government-supported savings scheme launched in 2015 under the “Beti Bachao Beti Padhao” campaign by the Ministry of Finance. It aims to promote financial security for girl children in India by encouraging parents to invest in their education and future wedding expenses.

The Sukanya Samriddhi Yojana (SSY) scheme, introduced under the “Beti Bachao Beti Padhao” initiative, is tailored to secure the future of girl children in India through systematic savings. Here are the key features, eligibility criteria, interest rates, and tax benefits associated with SSY:

Features of Sukanya Samriddhi Yojana (SSY):

  1. Minimum Deposit: INR 250 initially, with subsequent deposits in multiples of INR 100.
  2. Maximum Deposit: Up to INR 1,50,000 per year.
  3. Mode of Deposit: Deposits can be made via cash, cheque, demand draft, or online transfer.
  4. Account Operation: Guardians manage the account until the girl child turns 18. Afterward, the girl child assumes control.
  5. Duration: The account can be opened anytime before the girl child turns 10. It matures after 21 years from opening or upon her marriage after turning 18. Deposits are allowed for 15 years, with interest accruing until maturity irrespective of further deposits.
  6. Tax Benefits: Contributions qualify for tax deductions under Section 80C of the Income Tax Act. Additionally, interest earned and maturity proceeds are tax-exempt.
  7. Account Deactivation: Failure to meet the minimum annual deposit requirement deactivates the account. It can be revived with a penalty of INR 50 per year along with the required minimum deposit.

Eligibility Criteria for SSY:

  • Parents or legal guardians can open an account in the name of a girl child under 10 years of age.
  • The girl child must be a resident Indian.
  • A family can open a maximum of 2 accounts for two girls. In the case of twins or triplets, additional accounts can be opened, but the maximum limit is 3 accounts per family.

Interest Rate:

  • The current interest rate for SSY as of Q4 FY 2023-24 is 8.2% per annum, compounded annually. Interest rates are subject to quarterly revisions by the government.

Tax Benefits:

  • Contributions up to INR 1.5 lakh per year are eligible for deduction under Section 80C.
  • Interest earned and the maturity amount are exempt from income tax, falling under the EEE (Exempt, Exempt, Exempt) category.

How to open an Account for Sukanya Samriddhi Yojana?

Opening and managing a Sukanya Samriddhi Yojana (SSY) account involves straightforward procedures at authorized banks or post offices across India. Here’s a comprehensive guide on account opening, required documents, withdrawal rules, closure scenarios, and account transfer:

Opening a Sukanya Samriddhi Yojana Account:
  1. Location: Accounts can be opened at any authorized bank branch or post office branch.
  2. Form Submission: Obtain the account opening form from the respective bank or post office, fill it out, and submit it along with:
    • Birth certificate of the girl child.
    • Identity proof for both the girl child and the parent/legal guardian.
    • Address proof of the depositor.
    • Deposit fee as applicable.
  3. Verification and Activation: The submitted documents undergo verification, after which the SSY account becomes active.
Documents Required for Sukanya Samriddhi Yojana Account:
  • Account Opening Form
  • Birth Certificate of the Girl Child
  • Identity Proof (for both girl child and parent/legal guardian)
  • Address Proof of Depositor
SSY Withdrawal Rules:
  1. Permitted Withdrawal Scenarios:
    • Marriage Expenses: For the marriage of the girl child after she turns 18 years old.
    • Higher Education: Upon completion of Xth grade by the girl child and attaining 18 years of age.
  2. Withdrawal Limit: Maximum 50% of the account balance from the previous financial year can be withdrawn.
  3. Withdrawal Options: Withdrawals can be made in a lump sum or in up to 5 installments, as per the requirement.
SSY Closure Rules:
  1. Closure on Maturity:
    • The account matures when the girl child turns 21 years old or upon her marriage after 18 years. Application for closure, along with proof of identity and citizenship documents, results in the release of the account balance including interest.
  2. Premature Closure:
    • In case of the unfortunate event of the girl child’s death, the guardian can close the account with accumulated interest upon providing the death certificate.
    • Withdrawals are also permissible in scenarios such as medical treatment, marriage (within specified timelines), or change in citizenship/residential status.
Transfer of SSY Account:
  • SSY accounts can be transferred seamlessly from one part of the country to another. To initiate the transfer:
    • Fill out the account transfer form.
    • Submit it to the relevant post office or bank where the account is currently held.

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Official Income Tax Return filing website: https://incometaxindia.gov.in/

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