The Central Govt. launched the 'Sukanya Samriddhi Account' programme in January 2015 with an objective to promote the welfare of girl child. It is a small deposit scheme for girl child which ensures their secure future and reduce their financial difficulties which they might have in future for their education or even for their marriage. It was also a plan which was toward the mission of 'Beti Bachao, Beti Padao' which was also launched on the same day. So, Let's understand full details regarding it in very simple language:
1. Opening of Account:
The account may be opened by the natural or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of 10 years. Also, any girl child, who has attained the age of 10 years, one year prior to the commencement of these rules, shall also be eligible for opening of the account under these rules.
A Depositor (such guardian) may open only one account in the name of a girl child under these rules. Birth Certificate of such girl child AND Identity and residence proof of the depositor shall be submitted. Such guardian shall be allowed to open the account for two girl children only (except in cases when twin/three girl child is born together). It can be opened with Post-Offices and Notified banks as well.
2. Deposits:
The account may be opened with an initial deposit of Rs. 1,000* and thereafter any amount in multiple of One hundred rupees may be deposited but the total amount deposited during the entire year shall not be less than Rs. 1,000 * and shall not exceeds Rs. 1,50,000 as well. The deposit in the account may be made through Cash, Cheque, or Demand Drafts.
[* Now this limit of Rs. 1,000 has been reduced to Rs. 250/- only]
Deposits can be made up to a maximum period of 14 years from the date of opening the account. After this period the account will only earn interest as per applicable rates.
3. Interest on Deposits:
Interest at the rate, to be notified by the Govt., compounded yearly (the account holder may also opt for monthly interest) shall be credited to the account until the account completes 14 years. The current interest rate as on date is 8.5% per annum.
4. Operation of Account:
The account shall be opened and operated by the natural or legal guardian of the girl child till the girl herself attains the age of 10 years. On attaining the age of 10 years, the girl child herself may operate the account. However, deposit in the account may be made by the guardian or any other person or authority.
5. Premature Closure of Account:
In the event of Death of the account holder (i.e. the girl child), the account shall be closed immediately on the production of the Death Certificate and the balance remaining in the account shall be paid to the guardian with interest. Apart from this, Where the Central Govt. is satisfied that operation or continuation of the account is causing undue hardship to the account holder, the govt. may allow pre-mature closure of the account only in the case of extreme compassionate grounds such as medical support in life-threatening diseases, death etc.
6. Transfer of Account:
The Account may be transferred anywhere in India if the girl child (i.e. the account holder) shifts to any other place other than the city or locality where account stands.
7. Withdrawal:
For the higher education and marriage of such girl child, withdrawal up to 50% of the account balance at the end of preceding financial year shall be allowed. But, the withdrawal shall be allowed only when the account holder girl child attains the age of 18 years.
8. Closure on Maturity:
The account shall mature on when the Girl child completes her 21 years but if her marriage takes place before being 21 years then it shall be deemed as mature. But the girl child has to furnish a declaration that she is not less than 18 years on the date of Closing the account.
9. Income tax benefit on Sukanya Samriddhi Account:
The deposits made to the account, and also the proceeds and maturity amount are fully exempt from tax under section 80C of Income Tax Act. It is similar to PPF in respect of Tax Deductions.
The author can also be reached at Taxeffects.blogspot.com or niteshkbind@gmail.com.
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