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.
- SSY or Sukanya Samriddhi Account is a savings scheme for the girl child aged upto 10 years for a tenure of upto 21 years.
- Parents or legal guardians need to make a minimum investment of ₹ 250 and can invest upto ₹ 1.50 Lakh every year under the sukanya samriddhi scheme.
- Under Sec 80C of the Income Tax Act, Sukanya Samriddhi Yojana comes with EEE (exempt, exempt, exempt) tax feature.
- SSY account matures after the age of 21 years.
- Premature withdrawal of funds is allowed as the girl attains the age of 18 years.
- Sukanya Samriddhi Yojana account offers an interest rate of 7.60%, last revised on 01 May 2023.
Sukanya samriddhi yojana eligibility
- Parents or guardians of a girl child upto 10 years of age can open an account in the name of the girl.
- At the time of opening the account, you need to deposit at least ₹ 250 by cash.
- Each financial year (April to March), you can deposit minimum ₹ 250 and maximum ₹ 1.50 Lakh/- by cheque, DD or Cash. To maximize interest income on the account, it is advisable to invest at the beginning of the year or as soon as possible.
- You can deposit contributions till the girl child reaches 14 years of age. Deposits cannot be made once the child is 14 years old.
Sukanya Samriddhi Yojana interest rate
1. The rate of interest for the 1st quarter of FY 2020-2021 i.e. January to 30 December 2023 has been kept unchanged to 8.4%.
2. The rate of interest for the 4th quarter of FY 2023-2024 i.e. 1 January 2023 to 31 March 2024 was 8.4%.
3. 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.
Financial Security to Girl Child – The amount in Pradhan Mantri Sukanya Yojna can come in handy for meeting higher education, marriage and other expenses of the girl child once she is 18.
Attractive rate of interest and fast capital growth – The sukanya samriddhi yojana scheme offers an attractive rate of interest similar to small savings schemes. Government announces the rate of interest at the beginning of each quarter of the financial year. Currently the Sukanya Samriddhi Yojana Interest rate is higher in comparison to PPF.
SSY and PPF Current and Past Interest Rates Comparison.
| Period | SSY Interest Rates | PPF Interest Rates |
|---|---|---|
| 1st jan, 2023 onwards | 7.60% | 7.10% |
| 1st Jan, 2023 - 30th September, 2024 | 7.60% | 7.10% |
| 1st April, 2023 - 30th June, 2024 | 7.60% | 7.10% |
| 1st January, 2023 - 31st March, 2024 | 8.40% | 7.90% |
| 1st October, 2023 - 31st December, 2024 | 8.40% | 7.90% |
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 lakhs
- 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
Frequently asked Questions
AnsNo,the maturity amount from the SSY account is not taxable, its exempt from tax.
AnsYou can claim deduction under section 80C upto a maximum of Rs.150000 for the amount deposited in the SSY account.
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