Sukanya Samriddhi Yojana Account (SSA) Breif Details

Introduction:

Finance minister, Arun Jaitley has made interest income and withdrawal from Sukanya Samriddhi Scheme tax-free. On Saturday, the Finance Minister said, "Investments in Sukanya Samriddhi Scheme is already eligible for deduction under Section 80C. All payments to the beneficiaries including interest payment on deposit will also be fully exempt." Sukanya Samriddhi Scheme is a new entrant in the small-savings schemes category aimed at encouraging savings for a girl child's education and marriage. The scheme was announced by the finance minister in his previous budget in July 2014 and the scheme was launched in January 2015 year.

Who can open the account? 

Sukanya Samriddhi Yojana a/c (or Khata) can be opened on a girl child’s name by her natural (biological) parents or legal guardian.

Age limit?

SSA can be opened in the name of a girl child from the birth of the girl child till she attains the age of  10 years.  ( As per SB Order No. 2/2015 : The Girl child who is born on or after  02.12.2003 can open account )

How many accounts can be opened?

A depositor may open and operate only one account in the name of same girl child under this scheme. The depositor (or) guardian can open only two SSA accounts. There is one exception to this rule. The natural or legal guardian can open two or three accounts if twin girls are born as second birth or triplets are born in the first birth itself.

Where to open a SSA account?

Accounts in name of the girl child can be opened in post offices or in any branch of a commercial bank that is authorized by the Central Government to open an account under this scheme rules.

Deposit Money Details to open the account? 

The account may be opened with an initial deposit of one thousand rupees. The minimum contribution in any financial year is Rs 1000. Thereafter the contributions can in multiples of one hundred rupees.A minimum of one thousand rupees shall be deposited in a financial year but the total money deposited in an account on a single occasion or on multiple occasions shall not exceed Rs 1.5 Lakh in a financial year.Deposits in an account may be made till the child completes fourteen years, from the date of opening of the account.

Details of penalty?

If minimum (Rs 1000 pa) amount is not deposited, the account will be treated as an irregular account. This can be regularized/renewed on payment of Rs 50 per year as penalty. Along with this, the minimum specified subscription for the year (s) of default should be paid.

Mode of deposit?

The deposits in Sukanya Samruddhi Yojana scheme can be made in the form of Cash or DD or Cheque. Where deposit is made by cheque or demand draft, the date of encasement of the cheque or demand draft shall be the date of credit to the account. The cheque or DD should be drawn in favor of the postmaster of the concerned post office or the Manager of the concerned bank.The depositor (parents or guardian) has to write the account holder’s name (child’s name) and the account number on the backside of the instrument.

What is the Rate of Interest?

The applicable rate of interest on SSA for the financial year 2014-2015 is 9.1%. This is one of the highest rates of interest offered by Government on small savings scheme.The rate of interest is not fixed and will be notified by the central government on a yearly basis.The account can be transferred anywhere in India if the girl shifts to a place other than the city or locality where the account stands.50 % (half of the fund) of the accumulated amount in SSA can be withdrawn for girl’s higher education and marriage after she attains 18 years of age. The account’s balance at the end of preceding financial year is used for the calculation.

Is premature closure allowed?

In the event of death of the account holder, the account shall be closed immediately on production of death certificate. the balance at the credit of the account shall be paid along with interest till the month preceding the month of premature closure of the account , to the guardian of the account holder.The scheme would mature on completion of 21 years of the girl child, from the date of opening of the account, with an option of keeping the account till marriage.

Documents required to open Sukanya Samriddhi Yojana Account:

Birth certificate of the girl child has to be produced. The depositor (parents or guardian) has to submit his/her identity and address proofs.On opening an account, the depositor shall be given a pass book. It will have date of birth of the girl child, date of opening of account, account number, name and address of the account holder and the initial amount deposited. The depositor has to present the passbook to the post office or bank at the time of depositing/receiving the interest/on maturity.Tax Benefits on Sukanya Samriddhi Yojana Account SchemeThe amount that is deposited under Sukanya Samriddhi Yojana Account will be eligible for income tax exemption under Section 80C of Income Tax Act, 1961.

At present, only the contribution of up to Rs 1.5 lakh toward Sukanya Samridhi Yojana is eligible for tax deduction under Section 80C. But discussions are on to also exempt the interest income and withdrawal amount. We can expect a formal announcement on this in the coming Union Budget 2015-16.

Sukanya Samriddhi Yojana Account vs Public Provident Fund (PPF)

Both Sukanya Samriddhi Yojana Account (SSA) and Public Provident Fund (PPF) aims to seed the savings habit but both schemes have their own pros and cons. Stressing on the girls role in making the India competitive and prosperous nation, Prime Minister Shri Narendra Modi has today launched a new small savings account for the girl child “Sukanya Samriddhi Yojana Account” as an integral part of the “Beti Bachao-Beti Padhao” campaign.

Sukanya Samriddhi Yojana Account was initially introduced by Shri Arun Jaitely in his maiden budget speech but has been officially launched today by Prime Minister Shri Narendra Modi. He has handed over bank account details to five girls under the “Sukanya Samridhi Yojna” (girl child prosperity scheme).

Sukanya  Samridhi  Yojna   is  a  special  deposit  scheme  for  girl child only but one another popular scheme  to  benefit  child (irrespective of girl or boy)  is  Public P rovident  Fund (PPF).Let’s see the difference between Sukanya Samriddhi Yojana Account and Public Provident Fund (PPF)

Sukanya Samriddi Yojana	Public Provident Fund
Only for Girl Child	For every Indian Citizen.
From the birth till she attains age of 10 years.	No age limit.
By the girl child who has attained the age of 10 years or by the natural or legal guardian.	By the Individual but by the natural or legal guardian for the minor child
Post office and nationalized banks but not private banks	Post office and nationalized banks, including private banks
One account for each girl child, maximum up to 2 or 3 accounts if twin girls are born in the second birth or triplets are born in the first birth	Each Individual can hold only one account in his name
Minimum Contribution    Rs.1,000	Minimum Contribution   Rs.500
Maximum Contribution   Rs.1.5 lakhs in all accounts	Maximum Contribution  Rs.1.5 lakhs in all accounts.
Interest Rate 9.1% per annum for fiscal year 2014-15.	Interest Rate 8.70% per annum for fiscal year 2014-15.
Tax benefit Contributed Amount will be deductible u/s 80C.	Tax Benefit Contributed Amount will be deductible u/s 80C.
Minimum tenure of contribution is 14 years from the date of opening of account	Minimum 15 years and then in blocks of 5 years.
Maturity 21 years from the date of opening of account.	Maturity 15 years from the date of opening of account.
Penalty Rs.50 per year if minimum contribution is not made.	Penalty Rs.50 per year if minimum contribution is not made.
Mode of Deposit Cash or Demand Draft or Cheque	Mode of Deposit Cash or Demand Draft or Cheque
Premature Withdrawal Allowed up to 50% for the girl’s higher education and marriage after she attains 18 years of age	No premature withdrawal is allowed except in case of death of the account holder.
No loan can be taken on the SSA balance	Loan can be taken from the third year of opening of account to the sixth year.
No tax will be levied on the maturity amount.	No tax will be levied on the maturity amount