SUKANYA SAMRIDDHI SAVINGS ACCOUNT (SSA) – Complete Information

Features and Income Tax Exemption on Sukanya Samriddhi Savings Account

FAQ

Can a Railway Employee can able to open the Sukanya Samriddhi Savings Account (SSA)?

A:Yes, but one who wish to open the Sukanya Samriddhi Savings Account (SSA) must have the Girl child less than 10 years / or one who is the guardian of girl child whose age is less than 10 years is eligible.

What is SUKANYA SAMRIDDHI SAVINGS ACCOUNT (SSA)

• Scheme is meant for long term savings for Girl Children to meet out their Education and Marriage expenses
• Sukanya Samriddhi Savings Account (Sukanya Samridhi Yojna) launched by Govt recently has received very good response as PM Mr.Narendra Modi gave personal attention to this scheme as a part of ‘Beti Bachao Beti Padhao’ campaign
• This long term savings plan which aims to provide wealth in two stages, viz at the time of higher education of girl children and at the time of their marriage.
• Sukanya Samriddhi Savings Account carries interest rate of 9.1 per cent.
• It is an Exempt, Exempt, Exempt Scheme as far as Income Tax is concerned i.e Investments in Sukanya Samriddhi Savings Account is eligible for Income Tax Exemption in the form of Deduction under Section 80C of IT Act.
• Secondly, interest earned under this scheme is fully exempt from Income Tax. And Finally, Wealth created in Sukanya Samriddhi Savings Account when it is paid at the time maturity is also fully exempted from Income Tax.
• Many Financial Experts have opined that this scheme has got following positive aspects
• Higher interest rate compared to PPF,
• Income tax exemption benefits,
• Flexibility in the scheme susch as deposits can be made any number of time with minimum of deposit in one time as low as Rs. 100 (Maximum limit Rs. 1.5 lakh in a year)
• Account can be transferred any where in India

SUKANYA SAMRIDDHI SAVINGS ACCOUNT (SSA)

Details of Sukanya Samriddhi Saving Account (SSA)

• Post Offices and all Nationalised Banks will offer this Scheme. Presently, selected branches of , Post Offices, State Bank of India , Bank of Baroda, Punjab National Bank, Bank of India, Canara Bank, Andhra Bank, UCO Bank, Allahabad Bank, and Corporation Bank are offering Sukanya Samriddhi Savings Scheme.
• Rate of interest 9.1% Per Annum(2014-15),calculated on yearly basis ,Yearly compounded. Interest Rate will be declared annually.
• Minimum INR. 1000/- and Maximum INR. 1,50,000/- in a financial year. Subsequent deposit in multiple of INR 100/- Deposits can be made in lump-sum No limit on number of deposits either in a month or in a Financial year
• A legal Guardian/Natural Guardian who is the depositor, can open account in the name of Girl Child by producing Birth certificate of a girl child in whose name the account is opened, address proof and identity proof.
• A guardian can open only one account in the name of one girl child and maximum two accounts in the name of two different Girl children.
• Account can be opened up to age of 10 years only from the date of birth. For initial operations of Scheme, one year grace has been given. With the grace, Girl child who is born between 2.12.2003 &1.12.2004 can open account up to1.12.2015.
• If minimum Rs 1000/- is not deposited in a financial year, account will become discontinued and can be revived with a penalty of Rs 50/- per year with minimum amount required for deposit for that year. 
• Partial withdrawal, maximum up to 50% of balance standing at the end of the preceding financial year can be taken after Account holder’s attaining age of 18 years.
• Account can be closed after completion of 21 years.
• If account is not closed after maturity, balance will continue to earn interest as specified for the scheme from time to time.
• Normal Premature closer will be allowed after completion of 18 years /provided that girl is married.
• Pre-Mature Withdrawal - To meet the financial requirements of the account holder for the purpose of higher education and marriage withdrawal up to 50% of the balance at the credit. However, such withdrawal shall be allowed only when the account holder girl child attains the age of eighteen years
• Closure on maturity or before maturity due to Marriage of Account Holder- On completion of twenty-one years from the date of opening account can be closed by paying the matured amount to the account holder (Femal Child). In the case of marriage of account holder prior to maturity of account and after attaing 18 years of age, this saving account will have to be closed. Matured amount in this case will be paid to account holder after production necessary age declaration.

Sukanya Samriddhi Account Vs PPF: complete details

The recently launched Sukanya Samriddhi Account (SSA) and Public Provident Fund (PPF) can be useful instruments for saving for the future needs of the children. The Sukanya Samriddhi Account can only be opened in the name of the girl child while PPF scheme can be availed by all. Experts say PPF scores over Sukanya Samriddhi Account in terms of liquidity (partial withdrawal facility) and other flexibilities. But Sukanya Samriddhi Account could potentially give higher returns, they add.

Sukanya Samriddhi Account Eligibility: A Sukanya Samriddhi Account (SSA) can 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.

Limit: An investor can open PPF accounts in the name of minors but a maximum of Rs. 1.5 lakh can be deposited every year including all the accounts. In case of Sukanya Samriddhi Account, a maximum of Rs. 1.5 lakh can be deposited per account.

Account Opening: A Sukanya Samriddhi Account (SSA) can be opened with an amount of Rs. 1,000 while it is Rs. 100 for a PPF account. Both these accounts can be opened at post offices and banks.

A charge of Rs. 50 will be levied both in Sukanya Samriddhi Account and PPF if the minimum contribution is not made every year.

Minimum and maximum contribution: In an Sukanya Samriddhi Account (SSA), a minimum of Rs. 1,000 has to be deposited every year and the maximum limit is Rs. 1.5 lakh. And there is no limit on number of deposits either in a month or in a financial year.

In case of PPF, an individual but has to deposit a minimum of Rs. 500 in a financial year while the maximum limit is Rs. 1,50,000. And deposits can be made in lump-sum or in 12 installments.

Sukanya Samriddhi Account Maturity: The Sukanya Samriddhi Account (SSA) can be closed after the girl child in whose name the account was opened completes the age of 21. If account is not closed after maturity, the balance will continue to earn interest as specified for the scheme from time to time. The maturity period of a PPF account is 15 years but it can be extended in blocks of five years.

Taxation: In terms for taxation, deduction up to Rs. 1.5 lakh is allowed under Section 80C in both the Sukanya Samriddhi Account and PPF. Also, both the schemes qualify for tax-free status on withdrawal and interest income.

Withdrawal: Partial withdrawal is permissible every year from the seventh financial year of opening the PPF account. In case of Sukanya Samriddhi Account, up to 50 per cent of the accumulated amount can be withdrawn after the account holder turns 18 while full withdrawal is possible after she turns 21.

Sukanya Samriddhi Account  Interest rate: The interest rate on Sukanya Samriddhi Account (SSA) and PPF is not fixed. 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 on Sukanya Samriddhi Account against 8.7 per cent on PPF.

Loan: A loan facility is available from the third financial year of opening the PPF account. In Sukanya Samriddhi Account there is no such facility.

What are the documents required to open the SSA?

You would require the following documents for opening of account:

·         Date of Birth proof for the child

·         Your Identity Proof

·         Your Address Proof

These are regular KYC documents that you require for opening a new bank account.

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