Sukanya Samriddhi Account for Minor Girl Child

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Sukanya Samriddhi Account for Minor Girl Child

In compliance of announcement by Finance Minister in his Budget Speech 2014-15 the Government of India has introduced a new scheme named “Sukanya Samridhhi Account” vide Notification No.GSR No.863(E), dated 2nd December, 2014. It has been decided to allow 9.1% rate of interest on investments in the scheme during the financial year 2014-15. This has the approval of Union Finance Minister.

Who can open this account?

The natural or legal guardian in the name of girl child may open this account. The account may be opened from the birth of a girl child to until she attains the age of 10 Yrs. However, any girl who attained 10 yrs, one year prior to the commencement of this account is also eligible. A depositor may open and operate only one account in the name of girl child.

While opening the account, the guardian must submit the birth certificate of girl child along with that his/her identity proof and residence proof.

A guardian must open maximum of two accounts. It means guardian or parents not allowed to open more than two accounts under this scheme. Exception to this rule is, third account is also allowed to open only in case of birth of twin girls as second birth or if the first birth itself results into three girl children. However, a guardian must submit the medical certificate regarding this.

Download Account Opening form for Sukanya Samriddhi Account

How much you can deposit?

Initial investment must be with Rs.1, 000. Thereafter, in the multiplication of Rs.100. Minimum yearly investment is Rs.1, 000 and maximum investment in a year is Rs.1, 50,000 (Year means a financial year). You can deposit up to completion of the 14th year of account opened.

If you do not deposit the minimum yearly deposit of Rs.1, 000 in any year, then such account is considered as inactive. To re-activate this account, you must deposit the penalty of Rs.50 for each inactive year along with that minimum subscription of Rs.1, 000 of those years.

How to deposit to this account?

You can deposit either by cash or through cheque or DD in the name of Postmaster (in case you have account with post office) or the Manager of the concerned bank where you have account. In case of payment through cheque or DD, effective date of investment will be the date of amount realized.

Will I get income tax Benefit under Sukanya Samridhhi Account?

You can invest upto Rs 1.5 lacs under the Sukanya Samridhhi Account . You will get Income Tax benefit under section 80C of Income Tax Act. ( updated in Budget 2015)

Is interest received under Sukanya Samridhhi Account tax free?

Yes, Interest received under Sukanya Samridhhi Account is tax freeAs per Notifications in Budget 2015 

How much is the interest?

Government of India will notify this on yearly base and is usually yearly compounding. However, for the financial year 2014-15 the government fixed the interest rate at 9.1%. This interest so compounded on yearly base will be credited up to the completion of 14 years.

PS: Interest under Sukanya Samridhhi Account may vary on year on year basis. Interest fo

Who can operate this account?

The account may be opened or operated by guardian until the girl child attains the age of 10 Yrs. However, once the girl child attains the age of 10 Yrs then child herself can operate the account. However, depositing will be through guardian only.

Whether premature closure allowed?

Yes, it is allowed in case of death of account holder i.e. girl child. The balance along with interest earned will be payable to guardian. Apart from this if, you are really facing financial difficulties and Government satisfy with such hardship, then it may allow premature closure. Examples of such extreme difficulties are like medical support in life-threatening diseases, death, etc.

Whether you get passbook?

You will get the passbook after opening the account. This contains all details like the child’s name, guardian, date of account opened, account number, address and the amount deposited. You must produce the passbook while depositing the account, receiving the interest and at the time of final closure.

Download PassBook Format for Sukanya Samriddhi Account

Whether account can be transferred?

You can transfer the account anywhere in India when a girl child shifts the place, which is other than the city, where account opened.

How much withdrawal allowed?

You can withdraw the 50% of the balance at the credit, at the end of preceding financial year. This must be to meet the financial requirements of child like higher education or marriage. However, do remember that girl child must attain the minimum age of 18 years for such withdrawal.

Suppose a girl married before the completion of 21 years of account, and then such account is not allowed to operate. The account is closed once she marries.

When the account will get closed?

The account will be closed once it completes 21 years. The account holder must submit the withdrawal slip along with passbook. If account not closed after 21 years, then the balance amount will continue to earn interest until the account closed.

Features of Sukanya Samriddhi Account

  • Sukanya Samriddhi account can be opened on girl child name by her biological parents of legal guardian.
  • Per girl child only single account is allowed. Parents can open this account for maximum two girl child. In case of twins this facility will be extended to third child.
  • Maximum age limit for opening this account is 10 years. One year relaxation available this year.
  • Minimum deposit amount for this account is 1000 Rs/- and maximum is 1,50,000 Rs/- per year.
  • If minimum amount is not deposited, there will be fine of 50 Rs/- every year of default.
  • Money to be deposited for 14 years in this account.
  • Money can be deposited by cash or cheque.
  • Maturity date is 21 years from date of opening or marriage date of girl child whichever is earlier.
  • Going forward expected interest rate of this account is 8.5-9% p.a.
  • One can withdraw 50% money for higher study of girl child after her age of 18 years.
  • Account can be opened in post office or in Authorized bank branches.
  • This account can be operated by parents of child till girl attains age of 10 years. On attaining age of ten years,   the account holder that is the girl child may herself operate the account.
  • This account can be closed in case of death of girl child.
  • Passbook facility is available with Sukanya Samriddhi account.
  • The pass book shall be presented to the post office or bank at the time of depositing money in the account and receiving payment of interest and also at the time of final closure of the account on maturity.

Document required for opening Sukanya Samriddhi account:-

  • Birth certificate of girl child
  • Address proof
  • Identity proof

Sukanya Samriddhi Account Vs PPF Account – Comparison

Lock-in period: Sukanya Samriddhi Account is locked for 21 years or at girls marriage after 18 years.

PPF account on the other hand has lock-in period of 15 years. PPF scores high in this case.
Interest Rates: Sukanya Samriddhi scheme currently offers 9.1% for this financial year. PPF on the other hand, offers around 8.7%.

Hence Sukanya Samriddhi scheme scores high in this case.

Partial withdrawals: In Sukanya Samriddhi scheme, partial withdrawal’s are allowed after 18 years of age to the tune of 50% for girl education. PPF on the other hand, partial withdrawal are allowed after 6 years with certain conditions.

Considering Indian Mind set, where in parents start accumulating funds for their daughter’s marriage and education since her birth, Sukanya Samriddhi Account is best investment option for all girl child. Hats off to Mr modi for coming up with this scheme.

Tax Benefit: Both Interest earned on PPF and Sukanya Samridhi is exempt from income tax.

Interest earned: Interet on PPF is curently at 8.7 % and on Sukanya Samridhi it is 9.1%. Hence Sukanya Samridhi is better as compared to PPF.

What is your view on Sukanya Samriddhi Girl Child Saving Scheme? Do you feel this is a good scheme promoted by Central Government. Please leave your comment below.

Comments

17 responses to “Sukanya Samriddhi Account for Minor Girl Child”

  1. ANAND DAGA Avatar
    ANAND DAGA

    need clarifications about:
    whether interest income from Sukanya Samriddhi a/c is chargeable to tax?
    who can contribute the amount to the child’s a/c? whether Grand Father can contribute to the a/c so opened?

    1. Tax Dost Avatar
      Tax Dost

      On taxablity for interest income, we are also waiting for clarification. Only parents can contribute.

  2. Father Avatar
    Father

    Main concern is will the interest be taxed… else the high interest rate is of no use.

  3. Poornima Avatar
    Poornima

    PPF is far better than this scheme. I wasted time reading all about this scheme. No online transfer availability and no clarity on interest rate lock in period is also very high and I don’t see any garantee in getting money back on my daughter’s marriage. Nothing special for beti bachao

  4. mallampeta ravinder Avatar
    mallampeta ravinder

    Its ultimate and Good one for ever….hat’s off and wonderful package as a scheme been initiated by our honorable prime minister.
    Sir, I thank you whole heatedly for tremendous thinking for this era…and the HAPPIEST LIFE plan for the Girl Child future ahead.
    JAIHIND.

    Kind regards,
    Ravinder.

  5. Swarna Avatar
    Swarna

    I am a proud mother of a 3 years old daughter. But my concern is not about her education or marriage. the major concern is her safety. If the goverment can do something about the daily crimes againt the females happening throughout the country. I’ll prefer goverment to provide security to females rather than coming up with such schemes.

    What are your opinions about it?

    1. Tax Dost Avatar
      Tax Dost

      Madam, I completely agree with you. It is depends more on the kind of education and values we as parents / teachers give to our boys. They should be teach to respect ladies.

    2. Vinay Avatar
      Vinay

      Rightly said. Capital punishment for such offenders will only solve this. Look at how singapore brought in capital punishment rules to iron out corruption in the last 20 years! Unless capital punishment via fast-tracks courts are setup, crimes will always remain. If any govt official is involved, job should be terminated as well as retirement benefits voided simultaneously. If politicians are involved [even complicated], whole family should be brought under law and no election contesting by any family members.

      Social responsibility is another view but fear is a major factor in preventing crimes of that nature.

    3. I am CA Avatar
      I am CA

      “rather than coming up with such schemes”

      I believe that although India gallops ahead in development, we continue to live in a patriarchal society. Very few people would think of saving money for girl child’s education, healthcare and marriage unless given such incentives like deduction on principal amount deposited and tax free interest income

  6. Dr C S Shah Avatar
    Dr C S Shah

    can a person having PPF ac also open Sukanya Samridhi and invest altogether 3 Lac though claiming only Rs. 1.5 L under section 80 C for tax benefit ?

  7. Shanmuganathan P Avatar
    Shanmuganathan P

    Hi,
    Really I’m very glad & so happy to my 2 years daughter for this saving scheme.

    let me know clarify & help us please,

    If any possible to pay the fixed amount Once in starting year first Like to fixed Total amount min Rs:25,000 or max 1,50,000.

    And, If open Rs. 1000 and yearly i’l pay 1200, so totally i paid at end of 21 years amount Rs:26200/- (21*1200+1000). then
    How much we will get a total amount of scheme end.

  8. MAGENDRAN Avatar
    MAGENDRAN

    It’s good scheme for interest wise, Premature amount -50% will be getting @ 18 years and remaining 50% amount will be getting @ 21 years on behalf of Gift of Parents/Guardians gift to child future life.
    Jaihind..

  9. mahesh patel Avatar
    mahesh patel

    i have invested 30000 in sukanya samrudhdhi scheme in 3rd march 2014 . can i get benefit of 80 c (150000) this year (2014 ) . please reply me quikly

    1. Tax Dost Avatar
      Tax Dost

      Since payment was made last year, you will get benefit under section 80C , for financial year 2013-2014 only.

  10. trilochankaran Avatar
    trilochankaran

    This a/c will improve thinking for by new born girl children and bring joy to indian families.

    1. Tax Dost Avatar
      Tax Dost

      Right sir, I totally agree with you.

  11. Ranganayakulu Avatar
    Ranganayakulu

    Sir the scheme is good but these is very long period and approx minimum interest rate is better 9.5