Sukanya Samridhi Account as a part of Beti Bachao Beti Padhao campaign

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.

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