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Sukanya Samriddhi Yojana (SSY)

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What is the Sukanya Samriddhi Yojana (SSY)?

SSY aims at tackling a  major problem associated with the girl child – education and marriage. It is focused on securing a bright future for the girl child in India by facilitating the parents of a girl child in building a fund for the proper education and a carefree marriage expenses of their child. SSY has introduced the Sukanya Samriddhi Account for this very purpose.

What are its rules?

Particulars Provisions as per the SSY Rules 2016
Who would be the beneficiary of the SSY account Any girl child who is a resident Indian, from the time of opening the account, till the time of maturity/closure
Who can open the account? Parents or legal guardian of a girl child who has not attained the age of 10 years, can open the account
Who can deposit and operate the account? Either the guardian or the girl child (if she has attained the age of 10 years) may deposit the amount and operate the account

The account shall be mandatorily operated by the girl child after she attains the age of 18 years.

Number of accounts Only one account per girl child

Accounts can be opened for a Maximum of two girl children in one family, (including adopted children)

Accounts for more than two girl children are allowed in case of more than two girls being born in the first order of birth, or in a scenario of one girl child in the first order of birth, and twins or more than twins in the second order of birth

Where can an SSA account be opened? In any post office or authorized branch of commercial banks
Documents required to open the Account Birth certificate of the girl child

Identity and residential proof of the guardian

Medical certificate for proof of birth of multiple girl children on a single order of birth

Any other documents as required by the post office or banks

When can an SSA account be opened? Any time between the birth of the girl child till the time she attains the age of 10 years
Deposit threshold and tenure Minimum of Rs 250 (this amount was previously Rs 1,000), and a maximum of Rs 1,50,000 in every financial year, up to 15 years

Multiples of Rs 100, subject to the above cap

Mode of Deposit Through cash, cheque, demand draft or online transfer
Interest on deposits The rate of interest for the 2nd quarter of FY 2021-2022 i.e. 1 July 2021 to 30 September 2021 is 7.6% p.a.

The entire deposit in ‘Account under default’ (where a minimum amount of Rs 250 has not been deposited), which is not regularised within the prescribed time, would earn interest on the post savings bank account; except if the default is due to the death of the guardian who opened the Account

No interest is payable after the completion of tenure of the SSY, i.e after 21 years from account opening

No interest accrues after the girl child becomes a non-citizen or a non-resident of India

Consequences of excess or short deposit Excess –  Any deposit above the maximum cap will not earn any interest and can be withdrawn anytime by the depositor

Shortage – Account shall be considered as ‘Account under default’ if no minimum deposit is made in a financial year, and can be regularised within 15 years of Account opening on payment of a penalty of Rs 50 per default year

Tenure of SSA 21 years from the account opening date
Rules pertaining to the closure of SSA Closure on maturity
Account matures after completion of tenure of 21 years and the balance in the SSA, including interest, is paid to the child on submitting an application and proof of identity, residence, and citizenship documents

Premature Closure Allowed only in the following situations:
Reasons of intended marriage after a girl child attains the age of 18 years, an application can be submitted between one month prior to marriage and 3 months after marriage along with her age proof documents

Death of the girl child on the production of the death certificate the balance in the SSA will be paid to the guardian

Deemed closure in case of a change in the status of girl child i.e., girl child either becomes a non-resident or a non-citizen of India. Such a status change shall be communicated by the girl child or her guardian within one month of the status change

After completion of 5 years from the opening of an SSA, if the post office or Bank is satisfied that the operation or the continuation of the SSA is causing undue hardship to the girl child (such as the death of the guardian, medical reasons of the girl child), the girl child or guardian may order for premature closure

For any other reasons, if the SSA is to be closed anytime after the opening of this account, it will be permitted, but the entire deposit would only earn an interest rate applicable to post office savings bank

Withdrawal This is allowed for purposes of higher education if the girl child has either attained 18 years or completed 10th standard of school, for meeting the actual fee or other charges required at the time of admission

Documentary proof by way of a confirmed offer of admission in an educational institution, or a fee slip shall accompany the application for withdrawal

Withdrawal has a maximum cap of 50% of the balance in the SSA at the end of the preceding financial year. This can be made in either one lump sum or in 5 installments

Transfer of balance of the SSA Balance in the SSA can be transferred anywhere in India – from or to post offices, from or to banks, and between post offices and banks free of cost. This can be done upon furnishing of proof of change of residence of either the guardian or the girl child. Under any other circumstance, such a transfer can be made by paying a fee of Rs 100.

Sukanya Samriddhi Yojana interest rate

  • The rate of interest for the 2nd quarter of FY 2021-2022, i.e. 1 July 2021 to 30 September 2021, has been kept unchanged at 7.6%.
  • The rate of interest for the 1st quarter of FY 2021-2022 i.e. 1 April 2021 to 30 June 2021 was 7.6%.
  • The entire deposit in ‘Account under default’ (where a minimum amount of Rs 250 has not been deposited), which is not regularised within the prescribed time, would earn interest on the post savings bank account; except if the default is due to the death of the guardian who opened the Account.

What are the tax benefits provided to SSY?

In order to encourage investments in SSY, the SSA has also been provided with certain tax benefits:

  • Investments made in the SSY scheme are eligible for deductions under Section 80C, subject to a maximum cap of Rs 1.5 lakh
  • The interest that accrues against this account which gets compounded annually is also exempt from tax
  • . The proceeds received upon maturity/withdrawal are also exempt from income tax

How to open a Sukanya Samriddhi Yojana Account?

You can open a Sukanya Samriddhi Yojana (SSY) account with a participating bank or a Post Office branch. You need to follow the below procedure to open the account.

  1. Visit the bank or Post Office branch where you would like to open the account.
  2. Fill up the application form with relevant details and provide supporting documents.
  3. Pay the first deposit in the form of cash, cheque, or demand draft. The amount can be anything from Rs.250 up to Rs.1.5 lakh.
  4. The bank or Post Office will process your application and payment.
  5. Upon processing, your SSY account will be opened. A passbook will be issued for this account marking the initiation of the account.

Which ministry handles the Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana comes under the Ministry of Women and Child Development.

Which section covers the tax deduction for sukanya samriddhi yojana contributions?

Contributions made towards Sukanya Samridhhi Yojana can be considered for income tax deduction under Section 80C of the Income Tax Act, 1961.

How to submit proof for sukanya samriddhi yojana?

You have to walk down to the Post Office or a bank branch where you have submitted the SSY application to submit the documents and proofs. You need to submit a physical copy of the following documents:

  • Birth certificate of the girl child
  • Identity and address proof of the guardian
  • In the case of birth multiple girl children in a single order of birth, medical certificate for proof on the same
  • Any other documents as required by the post office or banks

What is the frequency of investment allowed under sukanya samriddhi yojana?

You can deposit money in an SSY account either once per financial year or in smaller, regular instalments. However, you need to make a minimum payment of Rs.250 per financial year to keep the account active and running and follow this criterion for a minimum payment period of 15 years.

If you choose to make deposits in instalments, the interval between the instalments can be anything as per your convenience. There is no restriction on the number of deposits you can make in a month or in a financial year.

How to claim/withdraw sukanya samriddhi yojana?

You must submit the duly filled withdrawal form along with the SSY account passbook to the bank or Post Office branch where the account is maintained.

In order to claim or withdraw prematurely, you need to satisfy some conditions, such as for marriage expenses or for the higher education of the girl child.

Upon maturity of the account, the amount will be paid to the girl child holding the account.

In another case, you may prematurely close the account and claim the deposit amount only after completing five years of account opening, for the following reasons:

  • On the death of the account holder.
  • A life-threatening disease of a/c holder.
  • Death of the guardian who operated the account.

How many accounts opened in sukanya samriddhi yojana?

Only one account can be opened per girl child, either in Post Office or in any bank. This account can be opened for a maximum of two girl children in a family. Only in the case of twins or triplets girls’ birth, more than two accounts can be opened in a family.

Who can withdraw money from sukanya samriddhi yojana?

Only the girl child, in whose name the account is opened, can withdraw the money from her SSY account upon maturity. The guardian can withdraw the money if the girl child has not attained the age of 18 years.

How to open sukanya samriddhi yojana in the post office?

  1. Visit the nearest Post Office branch.
  2. Fill up the application form with relevant information.
  3. Attach the supporting documents and proofs along with the application form.
  4. Pay the initial deposit as cash, cheque, or demand draft.
  5. The Post Office will process your application and payment. Once your SSY account is opened a passbook will be issued.

How much should I invest in sukanya samriddhi yojana?

You can invest any amount from Rs.250 up to Rs.1.5 lakh per financial year in the SSY account.

What is the age limit for sukanya samriddhi yojana?

The SSY account must be opened from the time of girl childbirth but before the girl child attains the age of 10 years.

How to transfer sukanya samriddhi yojana?

In order to transfer SSY account from Post Office (PO) to a bank, follow these instructions:

  1. Visit the PO branch where the account is held. The girl child need not visit the PO branch as the guardian can complete the process.
  2. Inform the PO executive about your intent to transfer the SSY account.
  3. Submit the duly filled account transfer form, the passbook, and KYC documents. The executive will discontinue the account on your request.
  4. Now, visit the bank branch where you would like to maintain the SSY account.
  5. Submit the self-attested KYC documents and any other paperwork provided to you by the PO executive while requesting to maintain the account with them.
  6. Once the bank executive processes your request, a new passbook will be provided.

What is the duration of the sukanya samriddhi yojana account?

The payment period for SSY accounts is 15 years, while the maturity period of the account is a minimum of 21 years.

Which is better? PPF or sukanya samriddhi yojana?

PPF is a government-backed retirement saving scheme whereas, SSY is a government-backed small savings scheme dedicated to girl child development. Both accounts provide tax benefits. While a PPF account can be opened by anybody, an SSY account can only be opened in the name of a girl child before she attains the age of 10 years. PPF balance can be liquidated to a certain extent, while the same may not be true for the SSY account.

Both schemes are designed for different purposes and therefore, picking a better option between the two schemes is tough. Here is a table that gives a comparative picture of both schemes.

What are the benefits of sukanya samriddhi yojana?

  • Affordable Payments: The minimum deposit required to maintain an SSY account is Rs.250 per fiscal year. You can make deposits as per your convenience up to Rs.1.5 lakh per fiscal year. The payments seem very affordable for people from all sections of the society.
    Even if you happen to miss out paying for a year, a penal charge of Rs.50 will be levied on the missed minimum payment of Rs.250 but the account will be continued.
  • Educational Expenses Covered: You can withdraw 50% of the account balance as of the previous financial year end to meet the educational expenses of your girl child. This can be availed on submitting the proof of admission.
  • Tax Benefits: You can claim tax benefits on the deposits you make towards the account, i.e. up to Rs.1.5 lakh per fiscal year under Section 80C of the Income Tax Act, 1961. The interest earned through this account is exempt from tax. Also, the maturity amount is also tax-exempt.
  • Attractive Interest Rates: The interest rate applicable to SSY accounts has always been high as compared to other government-backed schemes. Currently, the rate is at 7.6% p.a.

How much amount will I get in sukanya samriddhi yojana?

The maturity amount of an SSY account depends on the contributions you make every year. Further, you can prematurely withdraw 50% of the deposit amount once the girl child attains 18 years of age either for educational purpose or for marriage expenses.

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