Sukanya Samriddhi Scheme is a small savings scheme which was launched in January this year and is aimed at encouraging savings for a girl child's education and marriage.
Taxation: A contribution of up to Rs. 1.5 lakh qualifies for income tax deduction under Section 80C of Income Tax Act. The clarifications in the Budget now make it clear that the entire maturity amount of the Sukanya Samriddhi Scheme and the interest earned are non-taxable, says Suresh Sadagopan, the founder of Ladder 7 Financial Advisories. In terms of tax treatment, it is on the lines of Public Provident Fund which also qualifies for Section 80C benefits, he says. Mr Ramesh says Sukanya Samriddhi Scheme is a good investment option to save for a girl child's future needs because the maturity amount is tax-free in the hands of the girl child. When the scheme was launched earlier this year, it was not clarified whether the withdrawal as well as interest would be exempted from tax.
Opening of account: The account may be opened by the guardian in the name of a girl child till she attains the age of ten years. Only one account is allowed per girl child. Parents can open this account for a maximum of two children. In case of twins or triplets, this facility will be extended to the third child. Account can be opened in post offices or authorized bank branches.
Age: The maximum age limit of the girl child for opening this account is 10 years. This year, a one-year relaxation has also been given.
Maturity: The account can be closed after the girl child in whose name the account was opened completes the age of 21. If account is not closed after maturity, the balance will continue to earn interest as specified for the scheme from time to time.
Withdrawal: Up to 50 per cent of the accumulated amount can be withdrawn after the account holder turns 18.
Interest rate: The government will every year declare the interest rate of the scheme. For 2014-15, the government would be paying 9.1 per cent interest. In comparison, PPF pays 8.7 per cent for 8.7 per cent interest in 2014-15.
Transferability: The account may be transferred anywhere in India if the girl child shifts to a place other than the city or locality where the account stands.
Deposits: The account may be opened with an initial deposit of Rs. 1,000 and thereafter any amount in multiple of Rs. 100 can be deposited. The minimum deposit for a financial year is Rs. 1,000 and maximum Rs. 1.5 lakh. Deposits in an account can be made till completion of fourteen years, from the date of opening of the account.
Penalty: An account where minimum amount has not been deposited in a particular year will attract a fine of Rs. 50 per year.
Operation of account: The account will be opened and operated by the guardian of a girl child till the girl child, in whose name the account has been opened, attains the age of 10 years. On attaining age of 10 years, the girl child may herself operate the account.