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A tax saving deposit scheme for minor girl child-"Sukanya sukanyaSamridhi Account Scheme"

Launched under "Beti Bachao Beti Padhao" campaign, Sukanya Samriddhi Yojana is a small deposit account scheme with a long term vision of supporting education and marriage expenses of a girl child. This scheme is also notified as a tax saving investment option u/s 80C within the overall limit of Rs. 150000. Different facts about this scheme are as follows:

Account Opening
  • An account under this scheme can be opened with a Bank or Post Office.
  • Parents or legal gaurduian of a girl child can open an account in the name of the girl child.
  • Account can be opened from the birth of a girl child till she attains the age of ten years.
  • However if the girl child is already of ten years of age one year prior to implementation of these Rules, her parents/legal guardian can still open an account in her name. 
  • It simply means that a relaxation of one year in age is given for the accounts to be opened in 2014-15.
Format of application for opening Sukanya Samriddhi Account
Investment Amount
  • Initially account will be opened with Rs. 250 (The amount is revised in July 2018 earlier the minimum amount was Rs. 1000) investment
  • Minimum invstment required in a financial year is Rs. 250 (The amount is revise in July 2018 earlier the minimum amount was Rs. 1000).
  • Maximum Rs. 150000 can be deposited in any financial year.
Time period
  • Deposits can be made for fourteen years(14 years) from the date of opening of the account.
  • Account will mature after twenty one years(21 years) from the date of opening of account.
Penalty
  • In case of default in minimum deposit of Rs. 250(The amount is Revised in July 2018 earlier the minimum amount was Rs. 1000) in any year, a penal charge of Rs. 50 will be imposed.
  • Account will be active again on payment of the minimum investment of Rs. 1000 and the penalty of Rs. 50.
Withdrawals from the account
  • Withdrawals are permitted upto 50% of the balance in the account at the end(31st March) of the preceeding year.
  • Withdrwal can only be made to support the higher education or marriage expenses of the account holding girl child.
  • The withdrawal will be allowed only on the girl child attaining age of 18 years.
Interest
  • Interest rate will be notified by goverment from time to time.
  • Interest will be compounded yearly and will be credited to account till 14 years.
  • Interest earned is tax exempt. So no tax on interest income of the account.
  • From the financial year 2016-17  interest rate on small savings schemes has been reduced. Rate of interest is reduced to 8.6% from 9.2%.
Income Tax Benefits
  • Investment in this account qualifies for deduction as a tax saving investment U/s 80C within the overall limit of Rs. 150000.
  • Interest earned is tax exempt. So no tax on interest income of the account. 
Premature closure of Account
  • On the death of the account holder, account will be closed immediately on production of death certificate of the account holder.
  • Central Government if satisfied that the continuation of the account is causing undue hardship on the account holder, may allow premature closure of the account only in cases of extreme compassionate grounds like medical support in life threatening deseases, death etc.
  • In case od premature closure the amount along with interest will be paid the parent or the legal gaurdian of the account holder.
Closure of Account on Maturity
  • Account will mature on completion of 21 years from the opening of the account.
  • However if the marriage of the account holder takes place before completion of 21 years, then the account be matured/closed immediately.
  • In case of closure due to marriage of the account holder, the account holder needs to provide the affidavit that she is not less than 18 years of age.
Other Points
  • Account can be transferred to any place in India if the girl child in whose name the account is, shifts to that place.
  • Only one account can be opened in the name of a girl child.
  • Parents/gaurdian can open accounts on for two girl children.
  • Account for three girl children can only be opened if at the first birth three girls are born or at the time of second birth twin girls are born.
  • Money can be deposited in cash, cheque or/and DD.
  • Once girl child is of ten years of age, she can operate the account herself.
Quick Links:
Tax treatment of Income of a Minor Child
The Zero Balance Bank Account - Basic Savings Bank Deposit Account(BSBDA)
Budget-2015, implications for individuals










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