SSY or Sukanya Samriddhi Yojana is a scheme that was set up by Prime Minister Narendra Modi on 22 January 2015 in Panipat, Haryana, India. Sukanya Samriddhi Yojana Scheme (SSY) is aiming at tackling a major problem which is associated with the girl child and their education and marriage. This will help the parents of a girl child in India by facilitating the parents to have a bright future for their girl child, along with a worry-free marriage.
Rules of Sukanya Samridhi Yojana
The SSY account will be the beneficiary of any girl child who is a resident of India from the time of opening the account until maturity or closure.
The parents or legal guardians of a girl child who has not attained the age of 10 can open an account under the SSY Scheme.
Before the girl child attains the age of 10, the amount can be both deposited and operated by the guardian, but after the girl child attains the age of 18, the account should be operated mandatorily by the girl child.
IOnly1 account can be opened under the SSY Scheme in the name of a girl. In the case of one family, the account can be opened for a maximum of two girl children, including the adopted children.
In cases where more than two girls are born in the first order of birth, or in another scenario where one girl child is born in the first order of birth and twins or more than twins are born in the second order of birth, the opening of more than two accounts would be allowed.
The SSY Account can be opened in any post office or authorized branch of a commercial bank.
The following documents should be presented by the guardian of the girl child who is opening the account;
- The birth certificate of the child in whose name the account is opened,
- Identity and proof of residence of the guardian,
- MA medical certificate, which would serve as proof of birth, multiple girl children on a single order of birth,
- Any other document that the bank or the post office may specify
The account should be opened in the name of a girl prior to her attaining the age of 10 years, by depositing a minimum of INR 250 and a maximum of INR 1,50,000 in every financial year, which should be done up to 15 years.
The guardians should make the deposit in cash, cheque, demand draft, or online transfer.
The rate of interest on SSY for the first quarter (April 2021 to June 2021) and the second quarter of FY 2021-22 (July 2021 to September 2021) is kept at 7.6%. If the account is in default, as a minimum of INR 250 is not deposited and is not regularized within the prescribed time, interest on the post savings bank account will be earned. This is except for the case where such default was due to the death of the guardian who opened the account.
If 21 years have passed in the account, no interest shall be payable after the completion of such tenure. Interest shall also not accrue if the girl child becomes a non-resident or non-citizen.
If an excess deposit is made into the SSY account above the specified cap, which is INR 1,50,000, then such excess amount shall not earn any interest and can be withdrawn by the depositor at any time.
If the minimum amount has not been paid or made in a financial year, then the account can be regularized within 15 years of account opening on payment of a penalty of INR 50 per year of default made.
The tenure of SSA is 21 years from the opening of the account.
Closure on Maturity
On the account reaching maturity of 21 years, the total balance in the SSY account, which includes the interest accrued, shall be paid to the girl child on the furnishing or submission of the following, namely;
- Application,
- Proof of identity,
- Residence proof,
- And the citizenship documents.
Proper documents or applications should be made stating the reasons for the premature closure, such as the intention to get the child married as she attains the age of 18. Such an application can be submitted between 1 month prior to marriage and 3 months after marriage, along with the age-proof documents.
If the girl child in whose name the account is opened dies, the account can be closed by submitting the death certificate, and the balance in the SSY account will be paid to the guardian. There shall also be a deemed closure when the girl child’s status changes. The girl child either becomes a non-resident or non-citizen of India. This shall be communicated by the girl child or her guardian within one month of such status change.
After 5 years since the opening of the SSY Account, if the post office or bank is satisfied that the operation of the SSY Account or its continuation is likely causing undue hardship for the girl child due to death or other medical reasons, then the girl child or guardian may ask for premature closure.
After the opening of the SSY Account, if the same is to be closed any time before the same reaches maturity, the entire deposit in such account shall only earn an interest rate applicable to a post savings bank account.
Withdrawal from SSY Account
In a general sense, withdrawal shall be allowed for the higher education of the girl upon the girl attaining the age of 18 years or completing the 10th Standard of school. This can be used to meet actual fees and other charges pertaining to admission to the higher class. The following documents shall be submitted:
- Documentary proof confirming with regard to an offer for admission in an educational institution,
- Or a free slip,, whicshall accompany h shall accompany an application for the withdrawal of monent.
Withdrawal can be made up to a maximum of 50% of the balance in SSY as at the end of the preceding FY and can be made in one lump sum payment or five different instalments.
And the balance in the SSY account can be transferred, from or to;
– Post Offices,
– Banks, without any cost or free of cost.
However, a change of proof of residence shall be submitted for the same by the guardian or girl child, and the same shall be done with a payment of INR 100 as a fee.
Tax Benefits of the San SY Account
The tax benefits pertaining to the SSY Account would be:
- Dedication under section 80C, to a maximum of INR 1,50,000, shall be made available with respect to the investments made in the SSY Account.
- The interest accrued on the investment made in this account, compounded annually, is exempt from tax.
- The proceeds of the total amount received by the girl or her guardian on the maturity of the SSY Account are also exempt from tax.
