income tax
The Sukanya Samriddhi Yojana (SSY) serves as a pivotal savings scheme launched in January 2015 under the ‘Beti Bachao, Beti Padhao’ initiative. This government-backed program is designed to support parents and guardians in funding their girl child's education and marriage expenses while offering various tax benefits.
Eligibility: The scheme is available for parents or legal guardians of a girl child below the age of 10 years. Each family may open one account for each eligible girl child.
Account Opening: SSY accounts can be opened at designated post offices or authorized banks throughout India, ensuring accessibility across different regions.
Minimum Initial Deposit: A minimum initial deposit of ₹250 is required to establish an SSY account.
Maximum Annual Contribution: Investors can contribute a maximum of ₹1.5 lakh per financial year to their SSY accounts.
Deposit Period: Contributions can be made for 15 years from the account opening date. Following this period, the account remains active and continues to earn interest until the maturity period of 21 years.
Interest Rate: The government sets the interest rate for the SSY scheme and reviews it quarterly. Currently, for the first quarter of FY 2023-2024 (from 1 April 2023 to 31 June 2023), the interest rate is set at 8% per annum, compounded annually, promoting investment growth.
Partial Withdrawal: Once the girl child turns 18 years old, partial withdrawals are permitted, capped at 50% of the account balance as of the end of the previous financial year.
Tax Deduction (Section 80C): Contributions to the Sukanya Samriddhi Yojana qualify for tax deduction under Section 80C of the Income Tax Act. Specifically, investments up to ₹1.5 lakh per financial year can be deducted from the total taxable income.
Tax-Free Interest: Interest accrued on the SSY account is completely tax-exempt as outlined in Section 10 of the Income Tax Act.
Tax-Free Maturity Proceeds: The funds received upon maturity or withdrawal are likewise exempt from income tax.
The Sukanya Samriddhi Yojana stands out as an admirable tax-saving initiative aimed at enhancing financial security and educational opportunities for girl children in India. With its competitive interest rates and significant tax advantages, SSY fosters long-term savings while contributing to gender equality and the advancement of a more inclusive society. Taking advantage of this scheme can lead to a brighter, more secure future for young girls.