Topic 4: Sukanya Smariddhi Account : Tax and other benefits
Prime Minister Narendra Modi has Launched Sukanya Samridhi Yojna‘ (girl child prosperity scheme) with the vision to provide for Girl Child Education and Her Marriage Expense. Sukanya Samriddhi Account Scheme is a small deposit scheme for a girl child, as part of ‘Beti Bachao Beti Padhao’ campaign, which would provide income tax deduction Under section 80C of the Income Tax Act,1961 and exemption of Interest from Income Tax.
In this article we have discussed Provisions of this Scheme along with tax and other benefits :-
Date of Commencement of Scheme- Sukanya Samriddhi Account Scheme is been notified by Ministry of Finance vide Notification No. G.S.R.863(E) Dated 02.12.2014. Scheme become operational by notification of rules namely ‘Sukanya Samriddhi Account Rules, 2014’. These Rules were subsequently amended vide Notification No.G.S.R.323(E) dated-18.03.2016 by which government has notified ‘Sukanya Samriddhi Account Rules, 2016’. These Rules were further amended vide Notification No.G.S.R.617(E) dated-05.07.2018 by which government has notified Sukanya Samriddhi Account (Amendment) Rules, 2018. The Article Analyses these Rules for easy understanding of our readers.
Depositor– For this scheme, Depositor is an individual who on behalf of a minor girl child of whom he or she is the guardian and deposits amount in an account opened under this scheme. Under the revised rules definition of depositors also include Account Holder.
Who can be ‘Guardian’ under Sukanya Samriddhi Account Scheme:
In relation to a minor girl Child Guardian means
(i) either father or mother; and
(ii) where neither parent is alive or is incapable of acting, a person entitled under the law for the time being in force to have the care of the property of the minor.
(iii) Under the Revised Rules, Guardian Includes Legal Guardian too, Which means Parents of adopted Child adopted are also Guardian under the revised rules.
Age Restriction for Opening of Account under Sukanya Samriddhi Account Scheme:
The account may be opened by the natural or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of ten years and any girl child, who had attained the age of ten years, one year prior to the commencement of these rules shall also be eligible for opening of account under these rules. The scheme is been commenced from 02.12.2014.
Documents to Open the Account
No Fixed Interest Rate-
Under this scheme Interest rate is not fixed and Government will declare on yearly basis the Interest on accounts opened under these rules.
Sukanya Samriddhi Account Interest Rate Table with Minimum and Maximum Investment lImit
Where one can open account?:
At any post office in India doing savings bank work and Branch of a commercial bank authorised by the Central Government to open an account under Sukanya Samriddhi Account Scheme.
Maximum and Minimum Deposit:
The account may be opened with an initial deposit of one thousand rupees [this has been amended to Rs 250 ] and thereafter any amount in multiples of one hundred rupees (this has been amended to Rs 250 wef 05.07.2018) may be deposited subject to the condition that a minimum of one thousand rupees (this has been amended to Rs 250 wef 05.07.2018) shall be deposited in a financial year but the total money deposited in an account on a single occasion or on multiple occasions shall not exceed one lakh fifty thousand rupees in a financial year. The amount has been amended from RS 1000 to Rs 250 wef 05.07.2018 via Notification no. G.S.R. 617(E) Dated 05.07.2018
Minimum – Rs, 2,50/- Per Year
Maximum- Rs. 1,50,000/- Per Year
Term Period – Deposits can be made till completion of Fifteen Years (Earlier it was fourteen years) from the date of opening of the account. The maturity of the account is 21 years from the date of opening of an account. In other words No Deposit for the period from 16th to 21st Year of account.
Tax Benefit:
The amount deposited towards Sukanya Samriddhi Account is deductible under section 80C of Income tax Act,1961 upto Rs.1.5 lakhs as notified by Notification No. 09/2015 dated 21.01.2015. The amount deposited in this account will be counted in overall limit of Rs. 1.50 Lakh under section 80C. Interest earned in this scheme, as well as maturity amount, is exempt from Income Tax wef F.Y. 2014-15. Also, Read- Interest on & withdrawal from Sukanya Samriddhi Account exempt from Tax
Comparison with PPF in respect of Tax Benefit:
Investment in Both PPF & Sukanya Samriddhi Account is eligible for deduction under section 80C of the Income Tax Act, 1961. Like PPF in Sukanya Samriddhi Account also Interest and Maturity amount is exempt from Tax.
Benefits of Sukanya Samriddhi Account Scheme:
1. Higher Interest Rate
2. Tax Benefit Under Section 80C
3. Payment on Maturity to Girl Child.
4. Flexibility in Deposits- Any Number of time amount can be deposited in Multiple of Rs. 250 subject to Maximum Limit of Rs. 1.50 Lakh per year.
5. Transferable Anywhere in India.
6. Even Girl Child can operate after she attains the Age of 10 Year.
Conclusion: It’s a good scheme started with a good motto by the Government with a long term vision.
Source: taxguru.com
Date of Commencement of Scheme- Sukanya Samriddhi Account Scheme is been notified by Ministry of Finance vide Notification No. G.S.R.863(E) Dated 02.12.2014. Scheme become operational by notification of rules namely ‘Sukanya Samriddhi Account Rules, 2014’. These Rules were subsequently amended vide Notification No.G.S.R.323(E) dated-18.03.2016 by which government has notified ‘Sukanya Samriddhi Account Rules, 2016’. These Rules were further amended vide Notification No.G.S.R.617(E) dated-05.07.2018 by which government has notified Sukanya Samriddhi Account (Amendment) Rules, 2018. The Article Analyses these Rules for easy understanding of our readers.
Depositor– For this scheme, Depositor is an individual who on behalf of a minor girl child of whom he or she is the guardian and deposits amount in an account opened under this scheme. Under the revised rules definition of depositors also include Account Holder.
Who can be ‘Guardian’ under Sukanya Samriddhi Account Scheme:
In relation to a minor girl Child Guardian means
(i) either father or mother; and
(ii) where neither parent is alive or is incapable of acting, a person entitled under the law for the time being in force to have the care of the property of the minor.
(iii) Under the Revised Rules, Guardian Includes Legal Guardian too, Which means Parents of adopted Child adopted are also Guardian under the revised rules.
Age Restriction for Opening of Account under Sukanya Samriddhi Account Scheme:
The account may be opened by the natural or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of ten years and any girl child, who had attained the age of ten years, one year prior to the commencement of these rules shall also be eligible for opening of account under these rules. The scheme is been commenced from 02.12.2014.
Documents to Open the Account
- Birth documents of the girl child (Birth certificate)
- Address proof of the Guardian
- Identity proof of the Guardian
- 3 Photos of of the Guardians and 3 photos of the child
- Pan card and Aaadhar card copies of of the Guardians
No Fixed Interest Rate-
Under this scheme Interest rate is not fixed and Government will declare on yearly basis the Interest on accounts opened under these rules.
Sukanya Samriddhi Account Interest Rate Table with Minimum and Maximum Investment lImit
S. No.
Financial Year
Date Range
Interest Rate
Minimum Investment
Maximum Investment
1
2014-15
01/04/2014 to 31/03/2015
9.1 %
₹ 1,000/-
₹ 1,50,000/-
2
2015-16
01/04/2015 to 31/03/2016
9.2 %
₹ 1,000/-
₹ 1,50,000/-
3
2016-17
01/04/2016 to 30/09/20166
8.6%
₹ 1,000/-
₹ 1,50,000/-
4
2016-17
01/10/2016 to 31/12/2016
8.5%
₹ 1,000/-
₹ 1,50,000/-
5
2016-17
01/01/2017 to 31/03/2017
8.4%
₹ 1,000/-
₹ 1,50,000/-
6
2017-18
01/04/2017 to 31/03/2018
8.1%
₹ 1000
₹ 1,50,000/-
7
2018-19
01/04/2018 to 30/09/2018
8.1%
₹ 1000 (₹ 250 from 5th July 2018)
₹ 1,50,000/-
Where one can open account?:
At any post office in India doing savings bank work and Branch of a commercial bank authorised by the Central Government to open an account under Sukanya Samriddhi Account Scheme.
Maximum and Minimum Deposit:
The account may be opened with an initial deposit of one thousand rupees [this has been amended to Rs 250 ] and thereafter any amount in multiples of one hundred rupees (this has been amended to Rs 250 wef 05.07.2018) may be deposited subject to the condition that a minimum of one thousand rupees (this has been amended to Rs 250 wef 05.07.2018) shall be deposited in a financial year but the total money deposited in an account on a single occasion or on multiple occasions shall not exceed one lakh fifty thousand rupees in a financial year. The amount has been amended from RS 1000 to Rs 250 wef 05.07.2018 via Notification no. G.S.R. 617(E) Dated 05.07.2018
Minimum – Rs, 2,50/- Per Year
Maximum- Rs. 1,50,000/- Per Year
Term Period – Deposits can be made till completion of Fifteen Years (Earlier it was fourteen years) from the date of opening of the account. The maturity of the account is 21 years from the date of opening of an account. In other words No Deposit for the period from 16th to 21st Year of account.
Tax Benefit:
The amount deposited towards Sukanya Samriddhi Account is deductible under section 80C of Income tax Act,1961 upto Rs.1.5 lakhs as notified by Notification No. 09/2015 dated 21.01.2015. The amount deposited in this account will be counted in overall limit of Rs. 1.50 Lakh under section 80C. Interest earned in this scheme, as well as maturity amount, is exempt from Income Tax wef F.Y. 2014-15. Also, Read- Interest on & withdrawal from Sukanya Samriddhi Account exempt from Tax
Comparison with PPF in respect of Tax Benefit:
Investment in Both PPF & Sukanya Samriddhi Account is eligible for deduction under section 80C of the Income Tax Act, 1961. Like PPF in Sukanya Samriddhi Account also Interest and Maturity amount is exempt from Tax.
Benefits of Sukanya Samriddhi Account Scheme:
1. Higher Interest Rate
2. Tax Benefit Under Section 80C
3. Payment on Maturity to Girl Child.
4. Flexibility in Deposits- Any Number of time amount can be deposited in Multiple of Rs. 250 subject to Maximum Limit of Rs. 1.50 Lakh per year.
5. Transferable Anywhere in India.
6. Even Girl Child can operate after she attains the Age of 10 Year.
Conclusion: It’s a good scheme started with a good motto by the Government with a long term vision.
Source: taxguru.com