Contributed by: Ankita Ghosh (CA & CS Final Student)
Prime Minister Narendra Modi today launched a small deposit scheme for girl child, as part of the ‘Beti Bachao Beti Padhao’ campaign, which would fetch an interest rate of 9.1 per cent and provide income tax rebate.
‘Sukanya Samridhi Account’ can be opened at any time from the birth of a girl child till she attains the age of 10 years, with a minimum deposit of Rs 1000. A maximum of Rs 1.5 lakh can be deposited during the financial year.
The account can be opened in any post office or authorised branches of commercial banks.
“The scheme primarily ensures equitable share to a girl child in resources and savings of a family in which she is generally discriminated as against a male child,” said a government statement.
In an effort to motivate parents to open an account in the name of a girl child and for her welfare to deposit maximum of their savings upto the prescribed limits, higher rates of interest at 9.1 per cent is proposed to be given on the deposits on annually compounded basis with income tax concession in this financial year, the statement said.
The account will remain operative for 21 years from the date of opening of the account or marriage of the girl child after attaining 18 years of age.
To meet the requirement of higher education expenses, partial withdrawal of 50 per cent of the balance would be allowed after the girl child has attended 18 years of age.
“The provision of not allowing withdrawal from the account till the age of 18 has been kept to prevent early marriage of girls,” the statement said.
The Prime Minister handed over bank account details to five girls under the ‘Sukanya Samridhi Yojna’ (girl child prosperity scheme).
Tax Benefit:
The amount that is deposited under Sukanay Samriddhi Account will be eligible for income tax exemption under section 80C (Up to 1.5 Lakh).Interest amount earned on this account and withdrawal made from this account is currently taxable under this scheme.
PPF account or Sukanya Samriddhi Account (SSA)
Basic difference between PPF account and Sukanya Samriddhi Account is rate of interest. Current rate of interest payable on PPF (up to 2015) is 8.7%, while on SSA interest rate payable is 9.1%.
Another difference is PPF falls under tax exemption category means contribution, withdrawal and interest earned on PPF is tax free, while on SSA tax is applicable on interest earned and on withdrawal.
Note:
Interest rate under both the schemes will be notified each year by the Government.Interest will be compounded yearly under both schemes.Loan on the PPF balance is restricted to 25% of the balance at the end of 2ndyear.At present interest earned on SSA account is taxable in the hands of guardian but it may get tax rebate in the upcoming budget.Contributed amount get deduction u/s 80c up to Rs.1.5 lakhs including all other eligible investments.