SukanyaSamriddhi

 http://www.indiapost.gov.in/SukanyaSamriddhi.aspx

Prime Minister Narendra Modi in January this year launched a small deposit scheme for the girl child, as part of the 'Beti Bachao Beti Padhao' campaign. This scheme is specially designed for girls' higher education or marriage needs.

Opening of account: The account may be opened by the guardian in the name of a girl child till she attains the age of ten years. Only one account is allowed per girl child. Parents can open this account for a maximum of two children. In case of twins or triplets, this facility will be extended to the third child. Account can be opened in post offices or authorized bank branches.

Age: The maximum age limit of the girl child for opening this account is 10 years. This year, a one-year relaxation has also been given.

Interest rate: The government will every year declare the interest rate of the scheme. For 2014-15, the government would be paying 9.1 per cent interest.

Transferability: The account may be transferred anywhere in India if the girl child in whose name the account stands shifts to a place other than the city or locality where the account stands.

Deposits: The account may be opened with an initial deposit of Rs. 1,000 and thereafter any amount in multiple of Rs. 100 can be deposited. The minimum deposit for a financial year is Rs.1,000 and maximum Rs. 1.5 lakh. Deposits in an account may be made till completion of fourteen years, from the date of opening of the account.

Penalty: An account where minimum amount has not been deposited in a particular year will attract a fine of Rs. 50 per year.

Operation of account: The account will be opened and operated by the guardian of a girl child till the girl child, in whose name the account has been opened, attains the age of 10 years. On attaining age of 10 years, the girl child may herself operate the account.

Maturity: The account shall mature on completion of 21 years from the date of opening of the account or the date of marriage of the girl child, whichever is earlier.

Withdrawal: After the girl child attains the age of 18 years, 50 per cent of the money can be withdrawn for the higher studies.

Taxation: Investments under Sukanya Samriddhi give you tax benefit under Section 80C of the Income Tax Act. Suresh Sadagopan, the founder of Ladder 7 Financial Advisories, said there is a need for more clarity about the tax treatment for Sukanya Samriddhi scheme on different issues like whether the interest income or maturity proceeds would be taxable and how it will be taxed in the hands of the daughter.



Where Can You Open The Sukanya Samriddhi Yojana Account?

This account can be opened at post offices and commercial banks. Most of the commercial banks particularly the PSU banks will enable you to open this account.

While at the moment the list is not drawn and many government owned banks are still in the process of completing formalities to open the Sukanya Samriddhi Yojana Account, you may visit any of the government banks for the purpose of opening the account. Some of these banks include:

1) State Bank of India

2) Bank of Baroda

3) Punjab National Bank

4) Bank of India

5) Canara Bank

6) UCO Bank

7) United Bank

8) Andhra Bank

9) Allahabad bank

10) Indian Bank

11) Corporation Bank

12) Central bank of India

13) IDBI Bank

14) Dena Bank

You may also open the account at the post offices in the country.

Features of the Sukanya Samriddhi Yojana Account?

a) Who can open the account Sukanya Samriddhi Yojana Account?

The account can be opened in the name of the girl child who is 10 years or below. The girl child above this age is not eligible. Parents or guardians can open the account on behalf of the girl child.

b) What Are the documents that are needed to open Sukanya Samriddhi Yojana Account?

You would need the birth certificate of the child apart from the identity proof of the parent or guardian and their address proof.

c) Tax Benefits

Tax benefits are available under Sec 80C of the Income Tax Act. So, if you invest up to Rs 1.5 lakh each year, you would qualify for a tax rebate. Please note that interest earned on the deposits are fully taxable.

d) Early Withdrawal

Early withdrawal is allowed for marriage of the child or higher education It's important to note that only 50 per cent of the amount is allowed to be withdrawn early.

e) Is the account transferable?

You can move the account from banks to banks and post office to post office anywhere in the country.

f) Are NRIs allowed to invest in the Sukanya Samriddhi Yojana Account?

It's not clear as yet. However, NRIs are not allowed to invest in post office schemes and the chances are bright that they may not be allowed to invest in this scheme as well.

One needs to wait for further clarification on the details.

g) Interest rate

You would earn an interest rate of 9.1 per cent per annum on the scheme. The interest earned is taxable as mentioned earlier.

The Sukanya Samriddhi Yojana Account is a decent scheme that offers tax benefit and a good interest rate. It is not a bad idea to invest in the scheme if you have a girl child.

It gives you a great opportunity for long term investment.