CA Sandeep Kanoi

CA Sandeep KanoiCentral Government has notified Sukanya Samriddhi Account scheme vide Notification G.S.R.863(E) Dated 02.12.2014 to secure the future of Girl Child and Scheme has got good response too from the Citizens of India, considering the Tax benefit and Higher Rate of Interest which Scheme was providing. Interest Rate on the Scheme been revised downwards from 01.04.2016 to 8.60 from earlier 9.20% per annum vide notification No. G. S. R. 352(E) Dated 29/03/2016.

Government has made further changes in the Sukanya Samriddhi Account Rules, 2014 by notifying the Sukanya Samriddhi Account Rules, 2016 vide notification no. G.S.R.323(E) dated 18.03.2016.

We have made an effort to analyse such changes for ready reference of our readers in the following table:-

Sukanya Samriddhi Account Rules, 2016
Sukanya Samridhi Account Rules, 2014
Remark
1. In Definitions
(b) “Account holder” means a person in whose name the Account is held;No Such DefinitionRevised Rules has clarified that for Sukanya Samridhi Account, Account holder means a person in whose name the Account is held.
(d) “Bank” means any branch of a public sector or private sector commercial bank authorized by the Government to open an Account under these rules;(f) ‘Bank’ means any branch of a commercial bank authorised by the Central Government to open an account under these rules;Rule has clarified that Commercial Bank of Both Private and Public Sector can be Authorised by Government to open Sukanya Samridhi Account.
(e) “beneficiary” means an eligible girl child who is a resident Indian citizen at the time of opening of the account and remains so till the maturity or closure of the Account;No Such DefinitionAlthough it was implied that beneficiary will be Girl Child but it further clarified the following :-

a. Only Indian Resident Girl Child can be Beneficiary under the Rules.

b. Girl Child will remain beneficiary from opening of account to till the date of Closure or Maturity whichever happens earlier.

(f) “deposit” means the money deposited by the guardian or by the Account holder in an Account ;(c) ‘deposit’ means the money deposited by the depositor in an account under the rules;Here Rules has removed the discrepancy in definition as earlier definition was restricted and was allowing only account holder to deposit the amount in this account, which was not correct, as in most of the cases it is the Guardians who will be depositing in this account.
(g) “family” means a unit consisting of a person and his spouse (both or either of whom are alive or deceased) and their children, adopted or otherwise;No Such DefinitionClarified further that Account can be opened even for the adopted Daughters.
(i) “guardian” means natural or legal guardian of the beneficiary;No Such DefinitionWhat it Means is that Parents of Child adopted are included in the definition of Guardian.
(j) “Government” means the Government of India in the Ministry of Finance;No Such DefinitionWhat it means is that only Central Government can make changes in this Scheme and State Governments do not have power to amend the scheme.
(k) “interest rate” means the rate, as may be notified by the Government, to be applicable for a complete or part of the financial year;(h) ‘Interest rate’ means the rate as may be declared by the Government on yearly basis to be applicable on accounts opened under these rules;Now Government can amend the Interest Rate from time to time instead of Notifying the same once at the start of the year.
(l) “maturity” means maturity of an Account on completion of a period of twenty-one years from the date of its opening;No Such DefinitionClarified as per the provision of the Scheme.
(n) “notification” means a notification published in the Official Gazette;No Such DefinitionNotification issued but not published in Official Gazette will not be binding.
(o) “CBS” means Core Banking Solution platform or any other electronic platform which electronically connects all offices of a Bank and or the postal department simultaneously or in phases, for bringing speed, uniformity and ease in operational matters.No Such DefinitionEarlier it was not included but defined but now considering the fact that most of the Banks in India are working on Core Banking Solution platform the same been defined.
No Such Definitions(d) Depositor’ means an individual who – on behalf of a minor girl child of whom he or she is the guardian. deposits money in an account under the rules;Omitted.
3. Application of Post Office Savings Bank General Rules, 1981 and the Post Office Savings Account Rules, 1981.

The provisions of the Post Office Savings Bank General Rules, 1981 and the Post Office Savings Account Rules, 1981 framed under the Government Savings Bank Act, 1873 (5 of 1873) may be applied in relation to matters for which no provision has been made in these rules.

3. Application of Post Office Savings Bank General Rules, 1981 and the Post Office Savings Account Rules, 1981:

The provisions of the Post Office Savings Bank General Rules, 1981 and the Post Office Savings Account Rules. 1981 may be applied in relation to matters for which no provision has been made in these rules.

Further clarified – No Major Change.
4. Opening of Account.-

(1) The Account may be opened by the guardian in the name of a beneficiary who has not attained the age of ten years as on the date of opening of the Account:

Provided that nothing in these rules shall affect a beneficiary born on or after the 2nd December, 2003, whose Account was opened on or before the 2nd December,2015.

(2) Every beneficiary shall have a single Account under these rules.

(3) An application for opening of an Account in the Post Office or the Bank under these rules shall be accompanied with the birth certificate of the beneficiary in whose name the Account is to be opened, along with other documents relating to identity and residence proof of the guardian.

(4) An Account under these rules shall be opened for a maximum of two girl children in one family:

Provided that more than two Accounts may be opened for girl children in a family if such children are born in the first and/or in the second order of birth, on production of a certificate to this effect from the competent medical authority regarding the birth of such multiple girl children in the first two orders of birth in a family:

Provided further that the above proviso shall not apply to girl children of the second order of birth if the first order of birth in a particular family results in two or more surviving girl children.

4. Opening of Account

 

(1) The account may be opened by the natural or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of ten years and any girl child, who had attained the age of ten years, one year prior to the commencement of these rules shall also be eligible for opening of the account under these rules.

 

(2) A depositor may open and operate only one account in the name of a girl child under these rules.

 

(3) Birth certificate of a girl child in whose name the account is opened shall be submitted by the guardian at the time of opening of the account in post office or bank along with other documents relating to identity and residence proof of the depositor.

 

(4) Natural or legal guardian of a girl child shall be allowed to open the account for two girl children only:

Provided that the natural or legal guardian of the girl child shall be allowed to open third account in the event of birth of twin girls as second birth or if the first birth itself results into three girl children, on production of a certificate to this effect from the competent medical authorities where the birth of such twin or triple girl children takes place.

Specify the circumstances when account for more than two girl child can be opened.
5. Deposits.

(1) The Account may be opened with a minimum initial deposit of one thousand rupees and thereafter any amount in multiples of one hundred rupees may be deposited in an Account subject to the condition that a minimum of one thousand rupees shall be made as deposit in a financial year in one Account.

(2) The total money deposited in an Account shall not exceed one lakh fifty thousand rupees in a financial year:

Provided that the deposit in excess of one lakh fifty thousand rupees in any financial year shall, if accepted due to any accounting error, not be eligible for any interest:

Provided further that such amount, which is deposited in excess of an annual ceiling of one lakh fifty thousand rupees, may be withdrawn anytime by the depositor.

(3) Deposits may be made in an Account till the completion of a period of fifteen years from the date of opening of such Account.

(4) An Account in which minimum amount as specified in sub-rule (1) has not been deposited shall be considered as an Account under default:

Provided that an Account under default may be regularised on payment of a penalty of fifty rupees per year along with the such minimum specified amount for the year or years of default .

(5) If in the case of any Account, the default is not regularised within fifteen years of the opening of the Account, then the whole deposit, including the deposits made prior to the date of default, shall be eligible only for interest rate prescribed for Post Office Savings Bank at the time of its maturity and any amount credited wrongly by way of interest into an Account under default shall be reverted to the Government account as soon as it comes to the notice of the Bank or the post office concerned.

(6) Sub-rule (5) shall not apply if the default occurred because of the death of the guardian of the Account holder who opened the account and in such cases, the Account shall be eligible for interest under rule 7.

5. Deposits-

 (I) The account may be opened with an initial deposit of one thousand rupees and thereafter any amount in multiple of one hundred rupees may be deposited subject to the condition that a minimum of one thousand rupees shall be deposited in a financial year but the total money deposited in an account on a single occasion or on multiple occasions shall not exceed one lakh fifty thousand rupees in a financial year.

(2)   Deposits in an account may be made till completion of fourteen years. from the date of opening of the account.

(3)  An irregular account where minimum amount as specified in sub-rule (1) has not been deposited may be regularised on payment of a penalty of fifty rupees per year along with the said minimum specified subscription for the year (s) of default any time till the account completes fourteen years.

1. New Rules specifies that minimum one thousand rupees shall be deposited in the account and in case such deposit is not made than account shall be treated as account in default and same can be regularied  on payment of a penalty of fifty rupees per year along with the such minimum specified amount for the year or years of default .

2. New Rules also specifies that the if the default is not regularised within fifteen years of the opening of the Account, then the whole deposit, including the deposits made prior to the date of default, shall be eligible only for interest rate prescribed for Post Office Savings Bank at the time of its maturity and any amount credited wrongly by way of interest into an Account under default shall be reverted to the Government account as soon as it comes to the notice of the Bank or the post office concerned. But if the default occurred because of the death of the guardian of the Account holder who opened the account than account holder will get interest as applicable to Sukanya Samriddhi account.

3. New Rules also specifies that in case deposit in excess of one lakh fifty thousand rupees in any financial year is accepted due to any accounting error the excess amount will not be eligible for any interest and such excess amount can be withdrawn anytime by the depositor.

4.  Instead of fourteen now deposit can be made till  the completion of a period of fifteen years from the date of opening of such Account.

6. Mode of deposit and date of credit.-

(1) The deposit in the Account may be made by the guardian or by the beneficiary concerned if such beneficiary has crossed the age of ten years.

(2) The deposit may be made.-

(a) in cash; or

(b) by cheque or demand draft drawn in favour of the postmaster of the post office concerned or the Manager of the Bank concerned where the Account is opened, with an endorsement on the back of such instrument made and signed by the depositor indicating the name of the Account holder and Account number in which the deposit is to be credited; or

(c) through electronic means (e-transfer) in the concerned post office or Bank if such post office or bank has access to the facility of CBS.

(3) The date of credit of the deposit to the Account shall be determined as under:

(a) where the deposit is made by cheque, the date of encashment of the cheque;

(b) where the deposit is made by demand draft, the date of submission of the same to the Bank or post office; and

(c) where the deposit is made by e-transfer, the date of deposit.

6. Mode of Deposit– (1) The deposit in the account opened under these rules may be made –

a)  in cash; or

b) by cheque or demand draft drawn in favour of the postmaster of the concerned post office or the Manager of the concerned bank where the account stands and an endorsement on the back of such instrument shall be made and signed by the depositor indicating name of the account holder and account number in which the deposit is to be credited.

(2) Where deposit is made by cheque or demand draft, the date of encashment of the cheque or demand draft shall be the date of credit to the account.

Included Online  Payment mode also in mode of deposit to the account and also specified what will be the date of credit in case of such payments.
7. Interest on deposit.-

(1) The interest on deposit shall be compounded yearly at the rate notified by the Government in the Official Gazette from time to time and shall be credited, rounded off to the nearest rupee, to the Account of the beneficiary at the end of each financial year.

(2) The interest shall be calculated for the calendar month on the lowest balance in an Account on the deposits made between the close of the tenth day and the end of the month.

7.     Interest on deposit –    (1) Interest at the rate, to be notified by the Government, compounded yearly shall be credited to the account till the account completes fourteen years.

(2) In case of account holder opting for monthly interest, the same shall be calculated on the balance in the account on completed thousands, in the balance which shall be paid to the account holder and the remaining amount in fraction of thousand will continue to earn interest at the prevailing rate.

1. No interest on amount deposited after 10th of the Month for the Month of Deposit.

2.  No option of Monthly Interest.

8. Operation of Account.-

(1) The Account shall be operated by the guardian till the beneficiary Account holder attains the age of ten years or till the beneficiary Account holder attains the age of eighteen years.

(2) The Account shall be operated by the beneficiary Account holder after such Account holder attains the age of eighteen years: Provided that the Account may be operated by the beneficiary Account holder after such Account holder attains the age of ten years.

8. Operation of account – (1) The account shall be opened and operated by the natural or legal guardian of a girl child till the girl child in whose name the account has been opened attains the age of ten years.

(2) On attaining age of ten years, the account holder that is the girl child may herself operate the account. however, deposit in the account may be made by the guardian or any other person or authority.

Instead of the word account holder the word beneficiary been used.
9. Premature closure of Account.-

(1) In the event of death of the Beneficiary Account holder, the Account shall be closed immediately, on the production of death certificate issued by the competent medical authority, and the balance at the credit of the Account and interest due thereon till the date of death shall be paid to the guardian.

(2) If, after the opening of an Account, the Account holder becomes a non-citizen or non-resident of India, intimation to this effect shall be given by the guardian or the Account holder to the post office or the Bank concerned, as the case may be, within a period of one month from the date of such status of the Account holder’s citizenship or resident status.

(3) In the event of change of status of the Account holder’s citizenship or residential status, no interest shall be deemed to accrue to the Account from the change of such status and the Account shall be deemed to be closed prematurely from that date.

(4) The balance at the credit of an Account on the date of deemed closure under sub-rule (3) shall –

(a) be returned, along with interest due, to the Account Holder and if the account holder is not alive, then to the guardian;

(b) in case, any interest was credited to the Account after the change of resident status or citizenship of the Account holder, be reverted to the Government account by the post office or the Bank concerned, immediately on being informed of such change in the status of the Account holder.

(5) Where the post office or the Bank concerned is satisfied, in cases of extreme compassionate grounds such as medical support in life-threatening diseases of the Account holder or death of the guardian, that the operation or continuation of the Account is causing undue hardship to the Account holder, it may, after complete documentation, by order and for reasons to be recorded in writing, allow premature closure of the Account:

Provided that no premature closure of an Account under this sub-rule shall be made before completion of five years of the opening of such Account:

Provided further that premature closure of an Account may be permitted, anytime after the opening of an Account, for any reason other than provided under this sub-rule, and in which case the whole deposit shall be eligible only for the interest rate prescribed for the Post Office Savings Bank.

9. Premature closure of account-

(1) In the event of death of the account holder the account shall be closed immediately on production of death certificate issued by the competent authority. and the balance at the credit of the account shall be paid along with interest till the month preceding the month of premature closure of the account , to the guardian of the account holder.

(2) Where the Central Government is satisfied that operation or continuation of the account is causing undue hardship to the account holder, it may, by order for reasons to be recorded in writing, allow pre-mature closure of the account  only in cases of extreme compassionate grounds such as medical support in life‑ threatening diseases, death, etc.

1. Amended rule specifies that if after opening of account Account holder becomes a non-citizen or non-resident of India he has to intimate the same within a period of one Month and her account will be deemed as closed.

2. In case of pre-mature closure other than in cases specified deposit shall be eligible only for the interest rate prescribed for the Post Office Savings Bank.

3. Pre-Mature withdrawal  is permitted only after 5 Years of Opening of account.

4. Power to allow pre-mature withdrawal is been delegated to Bank and Post office while earlier such power was with Central Government.

5. Earlier Premature withdrawal was not allowed for reasons other than those specified under the scheme but now account can be closed for any reason after 5 Years of opening only thing is that in case of such closure account will be eligible   for interest rate prescribed for the Post Office Savings Bank.

10. Pass book.-

(1) On opening an Account, the guardian shall be given a pass book bearing the name, address and date of birth of the Account holder, date of opening of Account, Account number, name and address of the guardian, relationship with the Account holder and the amount deposited.

(2) A duplicate passbook may be subsequently issued in the event of loss, mutilation, etc., of the original passbook, on the written request of the guardian or the Account holder, on payment of a fee of fifty rupees and such fees shall be creditable to the Government account.

(3) The guardian or the Account holder shall have the option to maintain the Account records exclusively in electronic form, provided the post office or Bank concerned has access to the facility of CBS.

10.   Pass book– (1) On opening an account, the depositor shall be given a pass book bearing the date of birth of the girl child, date of opening of account, account number. name and address of the account holder and the amount deposited.

(2) The pass book shall be presented to the post office or bank. as the case may be, at the time of depositing money in the account and receiving payment of interest and also at the time of final closure of the account on maturity.

1. Allowed issue of Duplication pass book and specified fees for such issue.

2. Provided option to maintain the Account records exclusively in electronic form, provided the post office or Bank concerned has access to the facility of CBS.

11. Transfer of account.-

(1) The Account may be transferred anywhere in India and from or to post offices and from or to Banks and between post office and Bank, free of cost on furnishing of proof of shifting of residence of either the guardian or the Account holder and otherwise, on payment of a fees of one hundred rupees to the post office or the Bank to which the transfer is made.

(2) The process of transfer shall be effected electronically if the post office or the Bank concerned, has access to the facility of CBS.

11. Transfer of account –  The account may be transferred anywhere in India if the girl child in whose name the
account stands shifts to a place other than the city or locality where the account stands.
1. Specified that account can be transferred from bank to Post anywhere in India and from or to post offices and from or to Banks and between post office and Bank, free of cost on furnishing of proof of shifting of residence of either the guardian or the Account holder and otherwise, on payment of a fees of one hundred rupees to the post office or the Bank to which the transfer is made.
12. Withdrawal.-

(1) Withdrawal of upto a maximum of fifty per cent of the balance in the Account at the end of the financial year preceding the year of application for withdrawal, shall be allowed for the purpose of higher education of the Account holder:

Provided that such withdrawal shall not be allowed unless the Account holder attains the age of eighteen years or has passed tenth standard, whichever is earlier.

(2) The application for withdrawal under sub-rule (1) shall be accompanied by a documentary proof in the form of a confirmed offer of admission of the Account holder in an educational institution or a fee-slip from such institution clarifying such financial requirement.

(3) The withdrawal under sub-rule (1) may be made as one lump sum or in instalments, not exceeding one per year, for a maximum of five years, subject to the ceiling specified in sub-rule (1):

Provided that the amount of withdrawal shall be restricted to the actual demand of fee and other charges required at the time of admission as shown in the offer of admission or the relevant fee-slip issued by the educational institution.

12. Withdrawal-

(1) To meet the financial requirements of the account holder for the purpose of higher education and marriage, withdrawal up to fifty per cent of the balance at the credit, at the end of preceding financial year shall be allowed.

(2) The withdrawal referred to in sub-rule (1) shall be allowed only when the account holder girl child attains the age of eighteen years.

 

New Rules Specifies the Requirements for withdrawal for Educational Purposes. It further specifies that maximum withdrawal cannot exceed the required amount and   withdrawal may be made as one lump sum or in instalments, not exceeding one per year, for a maximum period of five years.
13. Closure on maturity.-

(1) The Account shall mature on completion of a period of twenty-one years from the date of its opening:

Provided that the final closure of the Account may be permitted before completion of such period of twenty one years, if the account holder, on an application, makes a request for such premature closure for reasons of intended marriage of the Account holder and on furnishing of age proof confirming that the applicant will not be less than eighteen years of age on the date of marriage:

Provided that no such premature closure shall be made before one month preceding the date of the marriage or after three months from the date of such marriage.

(2) On maturity, the balance including interest outstanding in the Account shall be payable to the Account holder, on an application by the Account holder for closure of the Account, and on furnishing documentary proof of her identity, residence and citizenship.

(3) No interest shall be payable once the Account completes twenty-one years from the date of its opening.

 

13. Closure on maturity

(1) The account shall mature on completion of twenty-one years from the date of opening of the account :

Provided that where the marriage of the account holder takes place before completion of such period of twenty-one years. the operation of the account shall not be permitted beyond the date of her marriage :

Provided further that where the account is closed under the first proviso the account holder shall have to give an affidavit to the effect that she is not less than eighteen years of age as on the date of closing of account.

 

(2)  On maturity, the balance including interest outstanding in the account shall be payable to the account holder on production of withdrawal slip along with the pass book.

(3) If the account is not closed in accordance with the provisions of sub-rule (1) interest as per the provisions of rule 7 shall be payable on the balance in the account till final closure of the account.

 

1. Earlier Account holders was required to give an affidavit that she is not below the age of 18 years but now she has to provide age proof.

2. Earlier premature withdrawal was possible once marriage takes place but now withdrawal is possible even if Depositor is intending to get married.

3. Specified the Period within which withdrawal must be made in case account holder is intending to get married or in case marriage has already taken place.

4. Earlier post maturity also if account holder do not close the account he was eligible for interest till final closure of the account but now No interest shall be payable once the Account completes twenty-one years from the date of its opening.

5. Earlier account use to get mature on completion of 21 Years or marriage whichever earlier but not account can be continued till 21 years.

 

14. Power to relax.-

Where the Government is satisfied that the operation of any of the provisions of these rules causes undue hardship to the Account holder, it may, by order and for reasons to be recorded in writing, relax the requirement of that provision or provisions in respect of such Account holder, in a manner not inconsistent with the other provisions of these rules.

14. Power to relax- Where the Central Government is satisfied that the operation of any provision of these rules causes undue hardship to the account holder or account holders it may by order and for reasons to be recorded in writing, relax the requirements of that provision in a manner not inconsistent with the provisions of the Act.Government has earlier not specified the power to relax conditions in respect of Sukanya Samriddhi Account Rules and now the same also been included.

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