Sukanya Samriddhi Yojana (SSY) Tax Benefits
Close
Close

Buy a life insurance plan in a few clicks

Now you can buy life insurance plans completely online right here.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.

  • Kotak E-Invest Plan

    Kotak e-Invest is a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and needs - be it protection; investment; financial security for child or retirement planning.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Back

What are the tax benefits of Sukanya Samriddhi Yojana (SSY)?


Save Tax Now What are the tax benefits of Sukanya Samriddhi Yojana (SSY)?

There’s no doubting that a nation’s future is in its children’s hands, with both boys and girls expected to play an equally significant role in its development. India has enormous future growth potential, which can only be realized through inclusive measures. But, unfortunately, women in India have been denied basic rights, making it difficult for them to realize their potential completely.

As a result, the Sukanya Samriddhi Scheme was created to help women overcome the financial barriers that previously hindered them from attaining their full potential. As part of the ‘Beti Bachao Beti Padhao’ campaign, Prime Minister Narendra Modi launched this small savings initiative to pay for girl child’s education and marriage needs, giving them enough possibilities to fulfil their ambitions. Thanks to a slew of perks for both the female child and her parents/legal guardians, this scheme ensures that deposits aren’t too hard on a family’s pocket, allowing them to continue their normal way of life without additional expenses.

Read on to find out more about what this scheme offers and how parents and girl children can benefit from it.

Sukanya Samriddhi Yojana (SSY): An Exceptional Scheme for a Girl Child

The Government of India launched the Sukanya Samriddhi Yojana to raise funds for a girl child’s education and marriage. The reduction in the country’s sex ratio prompted the creation of this initiative. It aims at providing a bright future for India’s girl children by assisting their parents in establishing a fund for their child’s proper education and worry-free marriage expenses. The parents or guardians of a girl child can use SSY to collect funds to help with their daughter’s education and marriage expenses.

Apart from securing girl children’s future, the Sukanya Samriddhi Yojana also proves to be an excellent tax-saving investment opportunity, which offers great interest rates. It empowers investors to save on taxes and create a long-term financial cushion for their girl child. Any parent of a girl child can avail the benefits by opening an SSY account in the name of their daughter before she turns ten years old.

A Host of Incredible Features

  • Deposition limit

  • A minimum of INR 250 (earlier set at INR 1000) and a maximum of INR 1,50,000 per year can be deposited in the SSY account.

  • The operator of the SSY account

  • After completion of 18 years of age, only the girl shall operate the account.

  • Eligibility Criteria

  • The girl child should be below the age of 10 years to be eligible for opening an SSY account.

  • A number of accounts

  • A maximum of two accounts can be opened for two girl children. A third account may be allowed in the case of twins during the first or second birth.

  • In case of no deposition

  • If no funds have been deposited, the account can be regularized with a penalty of INR 50 per year.

  • Tenure of the SSY account

  • Deposits have to be made for 15 years only, and the account matures after 21 years from the date of opening the account.

  • Premature withdrawal

  • Premature withdrawal is allowed after five years of maintaining the account if the parent or guardian passes away or due to other reasons like marriage.

  • Premature closure of SSY account

  • Premature closure is allowed in case of the girl’s marriage after attaining the legal age of 18 years. Other reasons like a medical emergency or financial burden on the girl child also allow premature closure of the SSY account.

SSY Account and Tax Benefits

There are several Sukanya Samriddhi Yojana tax benefits that one can avail by investing in such a financial tool.

1. A maximum of INR 1,50,000 per year can be claimed under Section 80C of the Income Tax Act, 1961.

2. The interest earned on the deposited amount is also tax-exempted under Section 80C.

3. The maturity amount received by the girl child is also tax-free.

Tax Deduction Eligibility Criteria for SSY

The parent or guardian of the girl child is eligible for opening an SSY account only if the girl is below the age of 10 years. In case the girl child is above the age of 10, the parents cannot open an account and claim SSY tax benefits. The Sukanya Samriddhi Scheme allows one depositor to make a financial contribution on behalf of a girl child. This depositor could be a parent or legal guardian of the child. While payments to this plan are tax-deductible, Section 80C of the Income Tax Act only allows one depositor to claim tax exemptions. This means that only one of the parents or legal guardians can claim exemptions.

Rate of Interest for SSY Deposition

The interest rate for the first quarter (from April 1 to June 30, 2021) and the second quarter (from July 1 to September 30, 2021) is 7.6% each. A noteworthy fact is that if a default occurs in an account formed under this scheme, such as failure to make the required deposit, INR 250, the rate of interest will be that of a post-saving bank account. However, this is not applicable as long as the default is not caused by the individual’s death who started the account under the scheme.

Sukanya Samriddhi Scheme is a mutually beneficial scheme for both the girl child and her parents/legal guardians, with affordable payments, tax benefits, and excellent interest rates, paving the path for a brighter future for the child.

- A Consumer Education Initiative series by Kotak Life

Tags

Also read

  • Save Income Tax by 31st March: Here Is a Checklist

    Looking for ways to save income tax before filing your returns? Click here to know more on how to reduce your taxable income create a foolproof design...

    Read more
  • Saving Income tax in 2017 - 18

    Saving tax need not be taxing any more

    Read more
  • How to Check ITR Status Online?

    An income tax refund is due to a taxpayer if he has paid taxes higher when compared to his actual tax liability, the status of refund can be checked e...

    Read more

Related Plans

  • Kotak e-Term Plan - Online Term Insurance

    Kotak e-Term Plan - Online Term Insurance

    Kotak e-Term Plan is a pure term insurance plan that provides a holistic life protection at affordable prices. Find out the eligibility criteria, key ...

    Know more
  • Kotak Assured Savings Plan

    Kotak Assured Savings Plan

    Kotak Assured Savings Plan is an affordable protection plan that enables you to accumulate wealth and strengthens your finances for the future.

    Know more