INCOME TAX SAVING Sukanya Samriddhi Yojana Scheme (SSY)

The Sukanya Samriddhi Yojana is a government savings scheme created with the intention to benefit girl child under the initiative called “Beti Bachao – Beti Padhao”. The parent or guardian of the girl child who is 10 years of age or younger can open an account under this scheme. This scheme carries a higher interest rate along with several tax benefits.

What are the requirements for opening a Sukanya Samriddhi Account?

To open a Sukanya Samriddhi Account, please note the following eligibility criteria:

1. Only parents or legal guardians are permitted to open an SSY account on behalf of a girl child.
2. The girl child must be below the age of 10 at the time of opening the account.
3. Only one account can be opened in the name of a girl child.
4. A maximum of two SSY accounts are allowed per family, one for each girl child.
5. Special cases may permit the opening of more than two accounts: a. If a girl child is born before the birth of twin or triplet girls, or if triplets are born initially, a third account can be opened. b. If a girl child is born after the birth of twin or triplet girls, a third SSY account cannot be opened.

Sukanya Yojana Interest Rates

Highlights	Details
Interest Rates	8% per annum (Q1 FY 2023-24)
Maturity Period (Sukanya Samriddhi Yojana Age Limit)	21 years or until the girl child marries after the age of 18
Minimum Deposit Amount	Rs. 250
Maximum Deposit Amount	Rs. 1.5 Lakh in a financial year
Eligibility	Parents or legal guardian of a girl child below the age of 10 are eligible to open the SSY in the name of the girl child
Income Tax Rebate	Eligible for rebate under section 80C of the Income Tax Act, 1961 (Maximum cap of Rs. 1.5 Lakh in a year)

Advantages of Investing in Sukanya Samriddhi Yojana:

1. Higher Interest Rates: Sukanya Samriddhi Yojana offers attractive interest rates, which are typically higher than those provided by other savings schemes. This enables your investments to grow at a faster pace over time.
2. Tax Benefits: Contributions made towards the Sukanya Samriddhi Yojana are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the interest earned and the final maturity amount are tax-free, making it a tax-efficient investment avenue.
3. Long-Term Savings for Girl Child: The scheme specifically aims to provide financial security and support for the girl child’s education, marriage, and overall well-being. By investing in the Sukanya Samriddhi Yojana, you can ensure long-term savings to fulfill these important milestones in your daughter’s life.
4. Government-Backed Scheme: The Sukanya Samriddhi Yojana is a government initiative, which adds an additional layer of security and reliability to your investments. It is backed by the government’s commitment to empower and uplift the status of the girl child in society.
5. Flexible Deposit Options: The scheme allows for flexible deposit options, giving you the freedom to choose the amount and frequency of your contributions. This flexibility enables you to align your investments with your financial goals and capabilities.
6. Account Transferability: In the case of relocation or change of address, the Sukanya Samriddhi Yojana account can be easily transferred from one authorized post office or bank to another, ensuring convenience and continuity in managing your investments.

Investing in the Sukanya Samriddhi Yojana provides numerous benefits, including higher interest rates, tax advantages, long-term savings for the girl child, government support, flexibility in deposits, and easy account transferability.

What is the process for investing in the Sukanya Samriddhi Yojana (SSY)?

To initiate investments in the Sukanya Samriddhi Yojana (SSY), prospective investors have the option to apply for the scheme through post offices or authorized public and private banks. Prior to opening an account, investors are required to furnish specific documents and adhere to the following procedural guidelines:

Sukanya Yojana Details: Documents necessary for account opening

1. Birth certificate of the girl child.
2. Photo identification of the parent or legal guardian who is applying.
3. Address proof of the parent or legal guardian.
4. Additional Know Your Customer (KYC) proofs like PAN card or Voter ID.

These documents are essential to fulfill the necessary requirements for opening an SSY account.

New Mandatory Requirements for SSY Account: Aadhaar and PAN

In accordance with the latest notification from the Finance Ministry, the provision of Aadhaar and PAN has become mandatory for opening a new Sukanya Samriddhi Yojana (SSY) account. The following guidelines should be noted:

1. Aadhaar Requirement:
   • If you do not have an Aadhaar number, you must provide proof of application or enrollment ID at the time of account opening. However, you must furnish the Aadhaar number to the Accounts Office within 6 months from the date of opening the account.
2. Existing SSY Account:
   • For existing SSY accounts without Aadhaar submission, the Aadhaar number must be submitted within 6 months from 1st April 2023.
3. PAN Submission:
   • If PAN was not submitted during account opening, it must be submitted within 2 months from the earliest occurrence of the following events:
     • The account balance exceeds Rs. 50,000 at any point in time.
     • The total credits in the account during a financial year exceed Rs. 1 lakh.
     • The total withdrawals and transfers from the account in a month exceed Rs. 10,000.

Failure to submit Aadhaar within 6 months and PAN within 2 months will render the account inoperational until the Aadhaar number and/or PAN is provided to the accounts office.

The application process for the Sukanya Samriddhi Yojana involves the following steps:

1. Download the Application Form: Obtain the application form from the official websites of the Reserve Bank of India (RBI), Indian Post, or the participating public sector and private banks.
2. Fill in the Form: Complete the application form with accurate information regarding the girl child and the parent or legal guardian. The following essential fields must be filled:
   

a. Primary Account Holder: Provide the name of the girl child. 

b. Joint Holder: Specify the name of the parent or legal guardian. 

c. Initial Deposit Amount: Mention the amount for the initial deposit. 

d. Cheque/DD Number and Date: Provide the number and date of the cheque or demand draft for the initial deposit. 

e. Date of Birth: Enter the girl child’s date of birth along with relevant details from the birth certificate.

 f. Parent/Legal Guardian’s Identity: Provide identity proof of the parent or legal guardian, such as a Driving License, Aadhaar card, etc. 

g. Present and Permanent Address: Furnish the present and permanent address, as per the identification document of the parent or legal guardian. 

h. Other KYC Proofs: Include details of additional KYC proofs like PAN card, Voter ID card, etc.

By diligently completing these steps and providing accurate information in the application form, you can proceed with the Sukanya Samriddhi Yojana account opening process.

Opening the Scheme Offline: Step-by-Step Process

To open the Sukanya Samriddhi Yojana scheme offline, follow the step-by-step procedure outlined below:

1. Locate the Authorized Institutions: Identify the authorized institutions, such as post offices or participating public and private banks, where you can open a Sukanya Samriddhi Yojana account.
2. Obtain the Application Form: Collect the application form required for opening the account. You can acquire the form from the respective institution’s branch or download it from their official website.
3. Fill in the Application Form: Fill in the application form with accurate details regarding the girl child and the parent or legal guardian. Provide the necessary information in the specified fields, ensuring accuracy and completeness.
4. Attach Required Documents: Attach the necessary documents as specified by the institution. These may include the girl child’s birth certificate, parent or legal guardian’s photo ID, address proof, and any other required KYC proofs.
5. Submit the Application: Submit the filled-in application form along with the attached documents at the designated counter of the authorized institution.
6. Make the Initial Deposit: Make the initial deposit as specified by the institution. Ensure you provide the required details, such as cheque/DD number and date, for the initial deposit.
7. Receive Acknowledgment: Upon successful submission, collect the acknowledgment receipt or any other relevant documents provided by the institution as proof of application submission.

By following this step-by-step process, you can open a Sukanya Samriddhi Yojana account offline and initiate your investment in the scheme.

Opening the Scheme Online: Step-by-Step Process

To open the Sukanya Samriddhi Yojana scheme online, follow the step-by-step procedure outlined below:

1. Download the IPPB App: Download the India Post Payments Bank (IPPB) app on your smartphone. This app will facilitate online payments to your SSY account.
2. Transfer Funds to IPPB Account: Transfer funds from your bank account to your IPPB account, which can be done through various online banking methods.
3. Access DOP Products: Launch the IPPB app and navigate to the DOP Products section.
4. Select Sukanya Samriddhi Yojana: Within the DOP Products section, choose the Sukanya Samriddhi Yojana account option.
5. Enter Account Details: Enter your SSY account number and your DOP client ID in the respective fields provided.
6. Specify Payment Amount and Instalment Duration: Select the desired amount you wish to pay and indicate the duration of the instalment (if applicable).
7. Confirm Payment Setup: After providing the necessary information, the IPPB app will confirm the successful setup of the payment procedure.
8. Receive Payment Notifications: You will receive notifications from the IPPB app each time a money transfer is conducted for your SSY account.

By following these step-by-step instructions, you can conveniently open the Sukanya Samriddhi Yojana scheme online and set up online payments to your account using the IPPB app.

Understanding the Tenure and Maturity Period of Sukanya Samriddhi Yojana

The tenure of the Post Office Sukanya Samriddhi Yojana is aligned with the girl child’s age, extending until she reaches 21 years or upon her marriage after turning 18. Notably, contributions are required for a period of 15 years only. Subsequently, the SSY account continues to accrue interest until maturity, irrespective of any additional deposits made.

Essential Highlights of Sukanya Samriddhi Yojana’s Additional Features

If an account holder of Sukanya Samriddhi Yojana (SSY) fails to make the minimum deposit of Rs. 250 in a given financial year, their account will be classified as a ‘Default Account.’ Despite being in default, the account will continue to earn interest at the applicable rate until the maturity date. However, it is possible to revive a defaulted account by making a payment of at least Rs. 250, along with an additional Rs. 50 for each year in default, before the completion of 15 years from the account opening.

Once a girl child reaches 18 years of age, she becomes eligible to operate her own SSY account. To assume control, she must submit all the required documents to the post office or bank where the account is held.

Withdrawals from the SSY account are permissible once the girl child turns 18 years of age or upon completion of the 10th standard, for the purpose of funding higher education expenses such as fees or related charges. The withdrawal amount can be up to 50% of the balance available at the end of the previous financial year. It is important to note that a maximum of one withdrawal can be made in a year, either as a lump sum or in instalments, for a maximum period of 5 years. The withdrawal amount is subject to specified limits and should align with the actual requirement for fees and other charges.

Early Closure of Sukanya Samriddhi Yojana Account: Guidelines and Considerations

Premature closure of a Sukanya Samriddhi Yojana account is permissible solely for a girl child upon reaching the age of 18, specifically for covering marriage-related expenses. Nonetheless, there are certain exceptional circumstances in which the account can be closed, and the corresponding funds can be withdrawn.

Account Closure in the Event of Accountholder’s Untimely Death in Sukanya Samriddhi Yojana

In the unfortunate event of the demise of the registered girl child in Sukanya Samriddhi Yojana, the parents or legal guardians are entitled to claim the remaining amount in the account, along with the accrued interest. The nominee assigned to the account will promptly receive the funds. However, to facilitate the process, the parents or legal guardians must submit the necessary documents certifying the account holder’s death, duly attested by the appropriate authorities.

Account Closure in the Event of Inability to Continue Sukanya Samriddhi Yojana

Premature closure of a Sukanya Samriddhi Account can occur if there are specific directives from the central government regarding the depository’s inability to continue maintaining the account. Additionally, closure may be considered if the depositor faces financial distress due to contributions towards the account. However, it is important to obtain appropriate permission from the competent authorities to initiate the closure and settlement process.

It is crucial to highlight that account closure within the Sukanya Samriddhi Yojana is reserved for exceptional circumstances, such as life-threatening illnesses or medical emergencies.

Guide to Investing in Sukanya Samriddhi Yojana

To invest in the Sukanya Samriddhi Yojana scheme, you can approach your local post office or designated branches of participating public and private banks. During the application process, it is necessary to submit KYC documents such as Passport, Aadhaar Card, and others, along with the completed application form and an initial deposit in the form of a cheque or draft.

To obtain the Sukanya Samriddhi Yojana (SSY) Application Form, you can visit a nearby post office or the branches of participating public and private sector banks. Alternatively, you may download the SSY New Account Application Form from various sources, including:

• The Reserve Bank of India Website
• The India Post Website
• Individual websites of public sector banks (SBI, PNB, BoB, etc.)
• The websites of participating private sector banks (e.g., ICICI Bank, Axis Bank, and HDFC Bank)

Although there are multiple sources for downloading the SSY application form, the fields in the form will remain the same regardless of the source.

How to Fill SSY Application Form

To fill the SSY Application Form, please ensure the accurate provision of essential information related to the girl child for whom the investment will be made under the Beti Bachao, Beti Padhao Yojana. Additionally, provide details of the parent/guardian who will be opening the account or making deposits on her behalf. The following are the key fields that are included in the SSY Application Form:

1. Name of the Girl Child (Primary Account Holder)
2. Name of the Parent/Guardian Opening the Account (Joint Holder)
3. Initial Deposit Amount
4. Cheque/DD Number and Date (applicable for the initial deposit)
5. Date of Birth of the Girl Child
6. Birth Certificate Details of the Primary Account Holder (Certificate Number, Date of Issue, etc.)
7. ID Details of the Parent/Guardian (such as Driving License, Aadhaar, etc.)
8. Present and Permanent Address (as per the ID document of the parent/guardian)
9. Details of any other KYC Documents (such as PAN, Voter ID card, etc.)

Once the above-mentioned details have been duly filled out, it is crucial to sign the Sukanya Samriddhi Yojana form. Submit the completed form along with copies of all applicable documents to the account opening authority, which could be either the Post Office or the Bank Branch.

Tax Implications of Sukanya Samriddhi Yojana (SSY):

From a tax perspective, investments made in SSY are categorized as EEE (Exempt, Exempt, Exempt). This implies that the principal amount invested, the interest earned, and the maturity amount are all tax-free.

Under the current taxation rules of Sukanya Samriddhi Yojana, individuals can avail a tax deduction benefit on the principal amount invested of up to Rs 1.5 lakh per year under Section 80C of the Income Tax Act, 1961. This deduction can help reduce the taxable income of the investor.

It is important to note that the tax benefits and rules may be subject to changes in tax laws and regulations, so it is advisable to consult with a tax professional or financial advisor for the most up-to-date and accurate information regarding tax implications of Sukanya Samriddhi Yojana.

Transfer of Sukanya Samriddhi Yojana (SSY) Account

One of the notable advantages of the SSY Account is its transferability within different regions of India. According to the existing rules, it is possible to transfer this tax-saving deposit account for the benefit of a girl child from one India Post Office to another, or from one designated bank branch to another, with ease.

To initiate the transfer of your SSY account from a post office, you need to complete and submit a transfer request form to the Post Master of the India Post Office where your account is currently held. Similarly, if you wish to transfer the deposit from one designated bank branch to another, transfer forms are available both online and offline.

By following the prescribed transfer process and submitting the necessary forms, you can conveniently transfer your SSY account, ensuring the continuity of the account and its associated benefits in the new location.

Sukanya Samriddhi Yojana Calculator

To assess the potential benefits of an investment, it is essential to consider the growth of the investment over time. The following example demonstrates the significant returns achievable by contributing to the Sukanya Samriddhi Yojana.

Let’s consider the following scenario:

• The girl child is born in 2020, and the parents initiate the SSY account in the same year.
• The account will reach maturity after 21 years, at which point the girl child will receive the full maturity amount.

Based on the given assumptions:

• Annual investments: Rs. 1 lakh
• Investment Period: 15 years
• Total amount invested at the end of 15 years: Rs. 15 lakh
• SSY interest rate for 1 year: 7.6%

Using these parameters, the calculations yield the following results:

• Interest earned at the end of 21 years: Rs. 3,10,454.12
• Maturity Value at the end of 21 years: Rs. 43,95,380.96

This example showcases the potential growth and returns that can be achieved by consistently contributing to the Sukanya Samriddhi Yojana over a specified investment period.

Frequently Asked Questions (FAQs):

Q: Can I take a loan against the balance in the SSY account? 

A: No, the option of availing a loan against the SSY account balance is currently not available. However, you can consider the option of taking a loan against a Public Provident Fund (PPF) account instead.

Q: Is premature closure of the Sukanya Samriddhi Yojana Account allowed?

 A: Yes, premature closure of the Sukanya Samriddhi Yojana account is permitted under certain circumstances. This may include compassionate grounds such as terminal illness or the unfortunate demise of the primary account holder. However, the decision to allow premature closure is evaluated on a case-by-case basis.

Q: Can I continue investing in SSY if my daughter and I move to another country?

 A: No, the SSY account will need to be closed if the girl child becomes a Non-Resident Indian (NRI) or loses her Indian citizenship.

Q: What is the penalty if I miss the minimum annual payment for my SSY account? 

A: If the minimum amount of Rs. 250 is not deposited in the SSY account during a financial year, a penalty of Rs. 50 will be imposed.

Q: Can I invest in Sukanya Samriddhi Yojana online?

 A: Currently, you can download the Sukanya Samriddhi Yojana form online. However, the application form and investment need to be made in person at a nearby post office or designated branches of participating public/private banks.

Q: Is there tax on SSY account interest?

 A: No, the SSY account falls under the category of completely exempt (EEE) investments. Therefore, the principal amount invested, the interest earned, as well as the maturity amount, are all tax-exempt.