“Unlock tax planning simplicity with Sukanya Samriddhi Yojana (SSY). Launched as part of ‘Beti Bachao, Beti Padhao,’ this government-backed savings scheme offers tax benefits and secure financial planning for your girl child’s education and marriage. Learn about eligibility, account opening, and tax advantages under Section 80C.”
Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme launched in January 2015 as a part of the ‘Beti Bachao, Beti Padhao’ campaign. The scheme was introduced to encourage parents and guardians to invest in the future education and marriage expenses of their girl child.
Here are the key features of the Sukanya Samriddhi Yojana:
1. Eligibility: Parents or legal guardians of a girl child below the age of 10 years can open an SSY account. Each family is allowed to open only one account for each eligible girl child.
2. Account Opening: The SSY account can be opened at designated post offices or authorized banks across India, making it accessible to a vast number of people.
3. Minimum Initial Deposit: To open an SSY account, a minimum initial deposit of Rs. 250 is required.
4. Maximum Annual Contribution: Investors can deposit a maximum of Rs. 1.5 lakh in the SSY account during a financial year.
5. Deposit Period: Contributions can be made for a period of 15 years from the date of account opening. After 15 years, the account continues to earn interest until maturity, which is 21 years from the date of account opening.
6. Interest Rate: The interest rate on the SSY scheme is set by the government and is reviewed quarterly. The interest is compounded annually, which helps in growing the investment over time. The rate of interest for the 1st quarter of FY 2023-2024, i.e. 1 April 2023 to 31 June 2023 is 8% p.a
7. Partial Withdrawal: Partial withdrawals are allowed once the girl child attains the age of 18 years, but it is limited to 50% of the balance at the end of the preceding financial year.
Tax Benefits under Sukanya Samriddhi Yojana:
1. Tax Deduction (Section 80C):
Contributions made towards the Sukanya Samriddhi Yojana are eligible for tax deduction under Section 80C of the Income Tax Act. This means that the amount invested, up to a maximum of Rs. 1.5 lakh per financial year, can be claimed as a deduction from the total taxable income.
2. Tax-Free Interest:
The interest earned on the SSY account is entirely tax-free. It is exempted from income tax under Section 10 of the Income Tax Act.
3. Tax-Free Maturity Proceeds:
The proceeds received upon maturity / withdrawal are also exempt from income tax.
Conclusion:
Sukanya Samriddhi Yojana is an exceptional tax-saving scheme introduced by the Indian government to promote financial security and education for the girl child.
With attractive interest rates and tax benefits, SSY encourages long-term savings, ensuring a brighter future for young girls, promoting gender equality, and contributing to a more inclusive society.
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Investment by HUF in name of minor daughter of family whether allowable for deduction u/s. 80C ?