Sukanya Samriddhi Yojana (Girl Child Prosperity Account) is a Government of India backed saving yojana targeted at the parents of girl children. Sukanya Samriddhi Yojana encourages parents to build a fund for the future education and marriage expenses for their female child.
Sukanya Samriddhi Yojana was launched by Prime Minister Narendra Modi on 22 January 2015 as a part of the Beti Bachao Beti Padhao campaign. The scheme currently provides an interest rate of 8.4% (for July-September 2019 quarter) and tax benefits. The account can be opened at any India Post office or branch of authorised commercial banks.
The account can be opened anytime between the birth of a girl child and the time she attains 10 years age. The account can be opened by the parent/guardian. Only one account is allowed per child. Parents can open a maximum of two accounts for each of their children (exception allowed for twins and triplets). The account can be transferred to anywhere in India.
A minimum of ₹250 must be deposited in the account initially. Thereafter, any amount in multiples of Rs 100 can be deposited. However, the maximum deposit limit is ₹150,000. If the minimum deposit of ₹250, (initially which was 1000) is not made in a year, a fine of ₹50 will be put on.
The girl can operate her account after she reaches the age of 10. The account allows 50% withdrawal at the age of 18 for higher education purposes. The account reaches maturity after time period of 21 years from date of opening it. Deposits in the account can be made till the completion of 15 years, from the date of the opening of the account. After this period the account will earn only applicable rate of interest. If the account is not closed, then it will not earn interest at the prevailing rate. If the girl is over 18 and married, normal closure is allowed.
At the time of launch, only the deposits in the account were eligible for tax deduction under Section 80C of the Income Tax Act, which is ₹150,000 in 2015-16. However, Finance Minister Arun Jaitley announced, during the 2015 Union Budget, tax exemption on the interest from the account and on withdrawal from the fund after maturity, making the tax benefits similar to that of the Public Provident Fund. These changes were applied retrospectively from 1 April 2015. These benefits will be reassessed annually.
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