Income Tax Saving: Can You Save Tax Through Sukanya Samriddhi Yojana

Scheme for Welfare of Girl child

The Sukanya Samriddhi Yojana (SSY) is a small savings scheme launched by the Government of India in 2015 to promote the welfare of the girl child.

High interest rate

The current interest rate on SSY accounts is 8.2% per annum, which is one of the highest among small savings schemes.

Tax benefits

Deposits made in SSY accounts are eligible for a deduction under Section 80C of the Income Tax Act, up to a maximum of Rs. 1.5 lakh per annum. The interest earned on SSY accounts is also tax-free.

Long tenure

The SSY account can be opened for a girl child up to the age of 10 years. The account matures after 21 years from the date of opening.

Partial withdrawal

After the girl child turns 18 years old, 50% of the balance in the SSY account can be withdrawn for her higher education or marriage.

Premature closure

The SSY account can be prematurely closed in certain cases, such as the death of the account holder or the girl child.

Low minimum deposit

The minimum deposit required to open an SSY account is only Rs 250. This makes the scheme affordable for even low-income families.

Investment and Maturity Amount

Investing Rs 12,500 every month for 15 years (180 months) amounts to a total investment of Rs 2,250,000. Assuming an interest rate of 8% per annum (current rate is 7.6%), the maturity amount after 21 years (252 months) would be around Rs 62,87,157.

SSY offers triple tax benefits

You can claim a deduction of up to Rs 1.5 lakh per year under Section 80C of the Income Tax Act for your investment in SSY. The interest earned on your investment is completely tax-free. The maturity amount, including both principal and interest, is also tax-free.