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SSY – Sukanya Samriddhi Yojana: Empowering the Girl Child

Introduction
SSY, also known as Sukanya Samriddhi Yojana, is a government-backed small savings scheme aimed at securing the future of girl children in India. This scheme is a part of the Beti Bachao, Beti Padhao Yojana and provides financial assistance for their education, marriage, and overall well-being. By understanding the features, eligibility criteria, account opening process, deposit options, checking balance, and withdrawal rules, individuals can effectively utilize the benefits of the SSY scheme.

Features of SSY
The Sukanya Samriddhi Yojana offers several attractive features:

  1. Flexible Deposit Options
    Parents or legal guardians can open an SSY account with a minimum deposit of Rs. 250 per annum. The maximum deposit limit is Rs. 1.5 lakh per annum, allowing individuals to contribute according to their financial capacity.
  1. Competitive Interest Rate
    The interest rate for the scheme is revised quarterly by the government. As of Q1 (April – June) FY 2023-24, the interest rate stands at 8% per annum. This interest is compounded annually, ensuring that the savings grow steadily over time.
  1. Long Maturity Period
    The SSY account has a maturity period of 21 years from the date of opening or until the girl child marries after attaining the age of 18. This extended tenure enables the account to accumulate a substantial corpus for the girl’s future needs.
  1. Portability and Transferability
    One of the convenient aspects of the SSY scheme is that the account can be transferred anywhere in India from one post office or bank to another. This allows flexibility for individuals who may relocate or wish to manage their accounts through a different branch.
  1. Tax Benefits
    Contributions made to the SSY account, the interest earned, and the maturity benefits are eligible for tax exemption under Section 80C of the Income Tax Act, 1961. This provides individuals with significant tax savings and encourages long-term savings for the girl child’s welfare.
  1. Premature Withdrawal Provision
    In case of financial emergencies or educational expenses, a premature withdrawal of up to 50% of the investment is allowed after the girl child reaches 18 years of age, even if she is not getting married. This provision offers financial flexibility while ensuring the account’s long-term growth.

Eligibility Criteria for SSY
To open an SSY account, certain eligibility criteria must be met:

  1. SSY accounts can only be opened by parents or legal guardians of a girl child.
  2. The girl child must be under the age of 10 at the time of opening the account.
  3. Only one SSY account can be opened in the name of a girl child.
  4. A family is allowed a maximum of two SSY accounts, i.e., one account per girl child.

Note: Exceptions to the two-account limit include cases of twins or triplets born in the first or second order, where multiple accounts can be opened on submission of an affidavit and relevant birth certificates. Additionally, if a girl child is adopted after having a biological girl child, another account can be opened for the adopted girl child, provided she meets the age criteria.

How to Open an SSY Account
Opening an SSY account is a simple process that can be completed by following these steps:

  1. Visit any designated bank or post office branch that offers the SSY scheme.
  2. Fill out the SSY account opening form and submit it along with the required documents, such as identity proof, address proof, and the girl child’s birth certificate.
  3. Deposit the initial amount (minimum Rs. 250) in cash or through a cheque.
  4. Collect the passbook provided by the bank or post office, ensuring its safekeeping for future reference.

How to Deposit Money in SSY Account
Contributing funds to an SSY account can be done through various modes of payment, including:

  • Cash
  • Cheque
  • Demand Draft
  • Online Transfer
  • Standing Instruction

Individuals can choose the mode that suits their convenience and make regular deposits within the minimum and maximum deposit limits. It’s important to note that failing to make any deposit in a financial year will attract a penalty of Rs. 50 along with the minimum deposit amount for account revival.

How to Check SSY Account Balance
To stay updated on the SSY account balance, individuals have the following options:

  1. Passbook: Visit any designated bank or post office branch and update the passbook. This allows individuals to check the account balance and track transactions.
  2. Online Banking: Register for online banking facilities provided by the bank or post office. This enables individuals to access their SSY account balance and transaction details through net banking or mobile banking platforms.

SSY Account: Tax Benefits, Withdrawal Rules, Transfer, and Closure

Tax Benefits of SSY Account
Investing in the Sukanya Samriddhi Yojana (SSY) account provides various tax benefits:

  • Contributions made to the SSY account are eligible for deductions under Section 80C of the Income Tax Act, 1961, with a maximum limit of Rs 1.5 lakh per annumIf you do not deposit the minimum amount of Rs. 250 in a financial year, your SSY account will become inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.
  • The interest earned on the SSY account is also tax-freeIf you do not deposit the minimum amount of Rs. 250 in a financial year, your SSY account will become inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.
  • The maturity amount received from the SSY account is exempt from taxIf you do not deposit the minimum amount of Rs. 250 in a financial year, your SSY account will become inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.
  • This triple tax benefit of EEE (Exempt-Exempt-Exempt) status makes the SSY account an attractive investment option.

Withdrawal Rules of SSY Account
Withdrawals from the Sukanya Samriddhi Yojana account follow specific rules and procedures:

  1. Partial Withdrawal: The account holder can withdraw up to 50% of the available balance at the preceding fiscal year for the girl child’s marriage or higher education expenses. This withdrawal can be made in one lump sum or in installments over a period of five years, according to the prescribed limits and fee/charge conditions.
  2. Age-Based Withdrawal: After a girl child reaches the age of 18 or completes 10th standard, she becomes eligible to withdraw money from her SSY account. To initiate a withdrawal, the account holder must submit documents such as university or college admission papers and fee receipts, supporting the purpose of withdrawal.

Withdrawals from the SSY account are governed by the following guidelines:

  1. Eligibility for Withdrawal: When a girl child reaches the age of 18 or completes the 10th standard, she becomes eligible to withdraw funds from the SSY account. It is important to note that if the minimum deposit amount of Rs. 250 is not made in a financial year, the SSY account becomes inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.
  2. Withdrawal Limitations: The account holder can withdraw up to 50% of the available balance from the preceding fiscal year for the purposes of the girl child’s marriage or higher education. Similar to the previous point, if the minimum deposit amount of Rs. 250 is not made in a financial year, the SSY account becomes inactive, leading to the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.
  3. Withdrawal Options: Withdrawals can be made either as a lump sum or in installments once a year for a maximum period of five years. However, the withdrawal amount is subject to prescribed limits and applicable fees/charges. As mentioned earlier, it is crucial to ensure the minimum deposit amount of Rs. 250 is made in each financial year to keep the SSY account active.
  4. Required Documents: To initiate a withdrawal, specific documents such as university or college admission papers and fee receipts need to be submitted. These documents serve as evidence for the purpose of the withdrawal and ensure compliance with the withdrawal process. Additionally, it is essential to maintain regular deposits of the minimum amount to prevent the account from becoming inactive and incurring penalties.

Please note that failure to deposit the minimum amount of Rs. 250 in a financial year will result in the SSY account becoming inactive, leading to the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.

To withdraw funds from an SSY account, follow these steps:

  1. Visit the bank or post office branch where the SSY account is held.
  2. Fill out the withdrawal application form and submit it along with the necessary documents, including proof of identity, address, and the purpose of withdrawal.
  3. Collect the desired withdrawal amount in cash or via a cheque, or choose to transfer it to another account.

Transfer Rules of SSY Account
Transferring an SSY account is a straightforward process:

  • The SSY account can be transferred from one post office or bank branch to another anywhere in India without incurring any charges.If you do not deposit the minimum amount of Rs. 250 in a financial year, your SSY account will become inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.
  • To transfer an SSY account, follow these steps:
  1. Visit the current bank or post office branch where the SSY account is held.
  2. Fill out the transfer application form and submit it along with the passbook and any required documents.
  3. Obtain an acknowledgment slip and proceed to the new bank or post office branch where the account is to be transferred.
  4. Submit the acknowledgment slip and any necessary documents, and collect the new passbook.

Closure Rules of SSY Account
Closing an SSY account is subject to specific rules:

  • The SSY account can be closed after 21 years from the date of opening or when the girl child marries after attaining 18 years of age, whichever occurs earlierIf you do not deposit the minimum amount of Rs. 250 in a financial year, your SSY account will become inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.If you do not deposit the minimum amount of Rs. 250 in a financial year, your SSY account will become inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.
  • To close an SSY account, follow these steps:
  1. Visit the bank or post office branch where the SSY account is held.
  2. Fill out the closure application form and submit it along with the passbook and any required documents, such as a marriage certificate if applicable.
  3. Collect the maturity amount in cash, via a cheque, or choose to transfer it to another account.

Note: Closure of an SSY account is not permitted one month prior to the scheduled marriage date or after three months from the marriage dateIf you do not deposit the minimum amount of Rs. 250 in a financial year, your SSY account will become inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid..

Premature Closure Rules of SSY Account
Premature closure of an SSY account is allowed only in exceptional circumstances:

  • Premature closure is permitted in cases such as the death of the account holder, medical treatment of life-threatening diseases for the account holder or guardian, or extreme compassionate grounds like loss of livelihood due to natural calamitiesIf you do not deposit the minimum amount of Rs. 250 in a financial year, your SSY account will become inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.If you do not deposit the minimum amount of Rs. 250 in a financial year, your SSY account will become inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.
  • To close an SSY account prematurely, follow these steps:
  1. Visit the bank or post office branch where the SSY account is held.
  2. Fill out the premature closure application form and submit it along with the passbook and any required documents, such as a death certificate, medical certificate, or proof of calamity.
  3. Collect the balance amount along with interest at a rate 1% lower than the applicable rate till the closure date, in cash, via a cheque, or choose to transfer it to another account.

By understanding the tax benefits, withdrawal rules, transfer procedures, and closure guidelines of an SSY account, individuals can make informed decisions and effectively manage their investments for the betterment of the girl child’s future.

Conclusion
Sukanya Samriddhi Yojana (SSY) stands as a powerful tool to secure the future of the girl child in India. By providing an avenue for long-term savings with attractive interest rates and tax benefits, the scheme empowers parents or legal guardians to invest in their daughters’ education, marriage, and overall development. With its flexible deposit options, portability, and premature withdrawal provisions, SSY ensures financial flexibility while promoting the financial inclusion and empowerment of the girl child.

Frequently Asked Questions (FAQs) about SSY – Sukanya Samriddhi Yojana

What is SSY?

SSY is a government-backed small savings scheme designed to benefit the girl child. It is a part of the Beti Bachao, Beti Padhao Yojana and can be opened by the parents or legal guardians of a girl child below the age of 10. An SSY account can be established at specific banks or post offices.

What are the benefits of SSY?

SSY offers a higher interest rate and several tax benefits. The current interest rate for Q1 (April – June) FY 2023-24 is 8% per annum. The principal amount deposited, interest earned during the entire tenure, and maturity benefits are tax-exempt under Section 80C of the Income Tax Act, 1961 (with a maximum cap of Rs. 1.5 Lakh per year).

What are the eligibility criteria for SSY?

Parents or legal guardians of a girl child can open an SSY account, and The girl child must be under the age of 10 at the time of opening the account.A single account can be opened in the name of a girl child.A family can have a maximum of two SSY accounts, one for each girl child. However, if twins or triplets are born in the first or second order of birth, more than two accounts may be opened on submission of an affidavit by the guardian supported with birth certificates.

How to open an SSY account?

To open an SSY account, you need to fill out an application form and submit it along with the required documents, such as identity proof, address proof, and the girl child’s birth certificate, at a designated bank or post office. Some banks also offer the option to open an SSY account online.

What is the minimum and maximum deposit amount for SSY?

The minimum deposit amount for SSY isRs. 250 per annum, and the maximum deposit limit for a financial year is Rs. 1.5 Lakh.. Deposits can be made in a lump sum or in instalments.

What is the maturity period and withdrawal facility for SSY?

The maturity period for SSY is 21 years or until the girl child marries after the age of 18, whichever is earlier. A premature withdrawal of up to 50% of the investment is allowed after the child attains the age of 18 years, even if she is not getting married. The account can also be closed before maturity in the event of the account holder’s death or on compassionate grounds, such as medical treatment of life-threatening diseases.

How to transfer an SSY account?

To transfer an SSY account within India from one post office or bank to another, the guardian needs to make a transfer request and pay a nominal fee of Rs. 100. The request must be supported by the original documents, including the passbook, identity proof, address proof, etc.

How to check the balance and interest earned on an SSY account?

To check the balance and interest earned on an SSY account, you can update the passbook at the post office or bank where the account is held. Some banks also provide an online facility to check the balance and interest earned on the SSY account.

How to calculate the maturity amount of an SSY account?

The maturity amount of an SSY account can be calculated using an online calculator that considers factors such as the deposit amount, interest rate, and tenure.Alternatively, you can utilize the following mathematical formula:

Maturity Amount = P * [(1 + r/n)^(nt) – 1] / (1 – (1 + r/n)^(-1/3))

Where, P = Annual deposit amount r = Annual interest rate n = Compounding frequency (quarterly) t = Tenure (in years)

Can I open an SSY account for my adopted daughter?

Yes, you can open an SSY account for your adopted daughter if she fulfills the eligibility criteria, including the age limit. You will need to submit the adoption certificate along with other required documents when opening the account.

Can I open an SSY account for my niece?

No, you cannot open an SSY account for your niece. Only parents or legal guardians of a girl child are eligible to open an SSY account.

Is it possible to deposit more than Rs. 1.5 Lakh in an SSY account within a financial year?

No, it is not permitted to deposit more than Rs.1.5 Lakh in a financial year in SSY account. This is the maximum limit set by the government. Any amount exceeding the limit will not earn interest and will not be eligible for tax benefits.

Can I change the nominee of an SSY account?

No, you cannot change the nominee of an SSY account. The girl child is the sole beneficiary of the account. However, in the event of the girl child’s death, the guardian can nominate another legal heir to receive the balance amount in the account.

Can I close the SSY account before maturity?

Yes, you can close the SSY account before maturity in the case of the account holder’s death or on compassionate grounds, such as medical treatment of life-threatening diseases. Relevant documents, such as the death certificate or medical certificate, will be required to close the account.

What are the penalties for not depositing the minimum amount in an SSY account?

If you do not deposit the minimum amount of Rs. 250 in a financial year, your SSY account will become inactive, resulting in the loss of interest earnings. To reactivate the account, a penalty of Rs. 50, along with the minimum deposit amount, must be paid.

Can I avail a loan against an SSY account?

No, you cannot avail a loan against an SSY account as it is not permitted by the government.

Can I open an SSY account online?

Yes, you can open an SSY account online if your bank provides this facility. You will need to fill out an online application form and upload scanned copies of the required documents. Additionally, you will have to link your bank account with your SSY account for making deposits.

Can I make deposits in an SSY account online?

Yes, you can make deposits in an SSY account online if your bank offers this facility. You can log in to your net banking or mobile banking and transfer the desired amount to your SSY account.

Can I change the mode of deposit in an SSY account?

Yes, you can change the mode of deposit in an SSY account from lump sum to instalments or vice versa as per your convenience. However, you cannot deposit more than 12 instalments in a financial year.

Can I change the bank or post office of an SSY account?

Yes, you can change the bank or post office of an SSY account by transferring it to another branch or institution that offers this scheme. A nominal fee of Rs. 100 needs to be paid, and you must submit the original documents, including the passbook, identity proof, address proof, etc.

What are the documents required for opening an SSY account?

The documents required for opening an SSY account are an application form, birth certificate of the girl child, identity proof of the guardian (such as Aadhaar card, PAN card, passport, etc.), address proof of the guardian (such as Aadhaar card, electricity bill, ration card, etc.), and photographs of the girl child and guardian.

What are the documents required for withdrawing from an SSY account?

The documents required for withdrawing from an SSY account are a withdrawal application form, the SSY account passbook, identity proof of the guardian (such as Aadhaar card, PAN card, passport, etc.), proof of age of the girl child (such as birth certificate, school certificate, etc.), and proof of purpose of withdrawal (such as admission letter, fee receipt, marriage invitation card, etc.).

What are the documents required for closing an SSY account?

The documents required for closing an SSY account are a closure application form, the SSY account passbook, identity proof of the guardian (such as Aadhaar card, PAN card, passport, etc.), and proof of reason for closure (such as death certificate, medical certificate, etc.).

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