Sukanya Samridhi Yojana Sheme – Eligibility, Tax Benefits & Rules

Sukanya Samridhi Yojana Sheme – Eligibility, Tax Benefits & Rules

SSY or Sukanya Samriddhi Yojana is a scheme which was set up by Prime Minister Narendra Modi on 22 January 2015 in Panipat, Haryana in India. Sukanya Samriddhi Yojana Scheme (SSY) is aiming at tackling a major problem which is associated with the girl child and their education and marriage. This will help the parents of a girl child in India by facilitating the parents have a bright future for their girl child along with a worry-free marriage.

Rules of Sukanya Samridhi Yojana

Any girl child who is a resident of India, from the time of opening the account, till the time of maturity or closure will be the beneficiary of the SSY account.
The parents or legal guardian of a girl child who has not attained the age of 10 years, can open the account under the SSY Scheme.
Before the girl child attained the age of 10 years, the amount can be both deposited and operated by the guardian but after the girl child attaining the age of 18 years, the account should be mandatorily operated by the girl child.
In the name of a girl, only 1 account can be opened under the SSY Scheme. And in the case of one family, the account can be opened for a maximum of two girl children which includes the adopted children also.
In case where, more than two girls being born in the first order of birth, or in another scenario where, one girl child in the first order of birth, and twins or more than twins in the second order of birth, the opening of more than two accounts would be allowed.
The SSY Account can be opened in any Post Office or authorized branches of commercial banks.
Following documents should be presented by the guardian of the girl child who is opening the account;

• Birth certificate of the child in whose name the account is opened,
• Identity and proof of residence of the guardian,
• Medical certificate which would serve as birth proof of multiple girl children on a single order of birth,
• Any other document which may be specified by the bank or post office.

The account should be opened in the name of a girl prior to her attaining the age of 10 years, by depositing a minimum of INR 250 and a maximum of INR 1,50,000 in every financial year which should be done up to 15 years.
Here the deposit should be made by the guardians in the form of cash, cheque, demand draft, or online transfer.
The rate of interest on SSY for the first quarter (April 2021 to June 2021) and the second quarter of FY 2021-22 (July 2021 to September 2021) is kept at 7.6%.
And if the account is under default as a minimum of INR 250 is not deposited and is not regularized within the prescribed time, which is not regularized, within such prescribed time limit, would earn interest on the post savings bank account. This is except for the case where such default was due to the death of the guardian who opened the account.
If 21 years have passed in account, no interest shall be payable after completion of such tenure. And the interest shall also not accrue if the girl child becomes a non-resident or non-citizen.
If there is an excess amount of deposit made into the SSY account which is above the specified cap which is INR 1,50,000 then such excess amount shall not earn any interest and can be withdrawn by the depositor at any time.
If the minimum amount has not been paid or made in a financial year, then the account can be regularized within 15 years of account opening on payment of a penalty of INR 50 per year of default made.
The tenure of SSA is 21 years from the opening of the account.

Closure on Maturity

On the account reaching maturity of 21 years, the total balance in the SSY account, which includes the interest accrued shall be paid to the girl child on the furnishing or submission of the following namely;

• Application,
• Proof of identity,
• Residence proof,
• And the citizenship documents.

For gaining a premature closure, there should be proper documents or applications made stating the reasons like intention to get the child married as she attains the age of 18 years. And such an application can be submitted between 1 month prior to marriage and 3 months after marriage along with the age proof documents.
In case the girl child in whose name the account is opened dies, the account can be closed by submitting the death certificate and the balance in the SSY account shall be paid to the guardian.
And there shall also be a deemed closure when the status of the girl child changes. The girl child either becomes a non-resident or non-citizen of India. This shall be communicated by the girl child or her guardian within 1 month of such status change.
On finishing of 5 years since the opening of the SSY Account, if the post office or bank is satisfied that such operation of the SSY Account or the continuation of the same is likely causing undue hardship for the girl child due to death or such other medical reasons, then the girl child or guardian may ask for premature closure.
After the opening of the SSY Account, if the same is to be closed any time before the same reaching maturity, the entire deposit in such account shall only earn an interest rate applicable to post savings bank account.

Withdrawal from SSY Account

In a general sense, the withdrawal shall be allowed for the higher education of the girl on the girl attaining an age of 18 years or completing 10^th Standard of school. This can be used for meeting actual fees and other charges pertaining to admission to the higher class. Following documents shall be submitted:

• Documentary proof providing a confirmation with regard to an offer for admission in an educational institution,
• Or a free slip which shall be accompanied by an application for the withdrawal of money from the account.

Withdrawal can be done to the maximum of 50% of the balance in SSY as at the end of the preceding FY and can be done in one lump sum payment or 5 different instalments.
And the balance in the SSY account can be transferred, from or to;
– Post Offices,
– Banks, without any cost or free of cost.
But a change of proof of residence shall be submitted for the same by the guardian or girl child, and the same shall be done with a payment of INR 100 as a fee.

Tax Benefits of SSY Account

The tax benefits pertaining to the SSY Account would be:

• Deduction under section 80 C, to a maximum of INR 1,50,000 shall be made available with respect to the investments made in SSY Account.
• The interest which is accrued on the investment made in this account, which is compounded annually exempt from tax.
• The proceeds or total amount received by the girl or the guardian on the maturity of the SSY Account are also exempt from tax.