Sukanya Samriddhi Account - Everything You Wanted to Know
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Sukanya Samriddhi Account – Special
scheme for girl child
For Any Query Feel Free to call us at 9313368533
You
must have heard about “Beti Bachao Beti Padhao” initiative recently on
television advertisements. As part of it, the government has recently announced
a scheme called “SUKANYA SAMRIDDHI ACCOUNT”, which is mainly for saving money for the girl
child. This is a welcome move, because a lot of investors will get some extra
incentive to save in the name of their girl child once they are born from a
long-term perspective
Let me
share with you all the benefits and features of this scheme in details
What is Sukanya
Samriddhi Account?How to open Sukanya Samriddhi Account – Real Experience
2) Filled the form and deposit it along with i)Date of Birth Certificate of my daughter, ii) my identity card copy ,iii) Latest electricity bill for residence proof
In my case they had written just depositor name ( girl child which is not correct way) and after bringing it to their notice they promptly corrected and said they write this way on all pass books but will be happy to know the correct method.
Thanks India post.
Sukanya
Samriddhi Account (SSA) is an investment scheme which can be opened for a
girl’s child. The scheme is specially designed for girls higher education or
marriage needs and should be opened by her parents or legal guardian(in case
parents are missing). One can deposit a maximum of Rs 1,50,000 per financial
year (Apr – Mar) and the yearly interest rate in this account is 9.1%
compounded on a yearly basis. Note that this interest rate is not fixed and
will be notified on a yearly basis or from time to time whenever applicable,
very much like PPF.
The
best part is that the investment in this account is exempted from income tax
under sec 80C.
Amount
of Deposit and Frequency
The
minimum amount one has to deposit per year is Rs 1,000 and maximum amount is Rs
1,50,000. There is no limit of the number of transactions in a year. When you
open the account for the first time, you have to deposit a minimum of Rs 1,000
and above that any multiple of Rs 100 (like Rs 1200 or Rs 1400 , but not Rs
1,450).
You
also need to make sure that you do not skip your payments each year, otherwise
a penalty of Rs. 50 will be levied for each year of non-contribution. At this point
of time, it’s not clear if NRI can invest in these schemes or not. I don’t see
any wordings in the official document published by govt. If someone has clarity
on that, please share it in comments section.
This
account can be opened before the girl attains 10 yr of age. So the moment the
girl child is born , you can open this account in her name or wait for some
years and open it later, but once the age of 10 is reached, one can’t open a
new account for the girl child. You can deposit the money in the account only
for the 14 yr period, from the date of opening, so the best thing is to open
the account early itself, so that you get the maximum window of 14 yr to
accumulate the money.
You
will need following documents to open this Sukanya Samriddhi account.
·
Birth certificate of girl child
·
Address proof
·
Identity proof
One can
open only maximum of 1 account per girl child and in total only 2 accounts can
be opened by parents for 2 girls (one for each), but in case the second birth
has resulted in twins, then 3 accounts are allowed. You can’t open multiple
accounts for the same child like you do in saving bank account.
Where
can you open this account?
As per
the notification, this account can be opened either in a Post Office or any
public sector bank. You will get a passbook under this scheme which will have
details of the account holder (daughter name) along with other information like
date of opening etc, like it happens in the case of PPF account.
Also, the account can be transferred to any city in India later if you wish.
As this
has been recently announced, I believe the banks and post office must be in the
implementation mode right now and must be training their staff on this. So if
you immediately visit them to open an account, you might face problems as the
staff might not be 100% clear of rules. So I suggest to wait for 2-3 months and
let the whole thing settle down.
Maturity
and Premature Withdrawal
Sukanya
Samriddhi Account will get matured after 21 yrs from the date of opening the
account or before the marriage of the girl, whichever is earlier. The good part
is that if parents want to close the account before 21 year for marriage
purpose, they have to give an affidavit that the girl has reached at least 18
yr of age, so that one can’t use it for child marriage (before 18 yr) .
One can
also partially withdraw 50% of the balance amount after the girl reaches 18
years of age, for the education purpose and rest has to be left in the account
so that it can be used for the marriage purpose.
Also in
the worst case, if there is death of the girl child, the account will have
to be closed the money will be paid to the legal heirs (mostly parents). Apart from that, the
account can still be closed much before in cases of extreme compassionate
grounds such as medical support in life threatening diseases. death, etc.
There
is no loan facility under this scheme.
How can
you deposit the money under this scheme?
You can
make the payment by Cash, Cheque or demand draft by going to the post
office or the bank where you have opened the account. Unlike PPF or Saving bank
account, you can’t deposit the money online as of now, which will really
discourage those investors who are too much into online transactions. However,
I am sure this is not a cause of concern for people from smaller cities and
villages who are the main target for this scheme.
Tax
applicable on the money deposited and earned and maturity amount?
As of
now, the taxation status of this scheme is ETE, means money deposited is exempt
from tax, interest earned is taxable, but maturity amount is again exempt. This
is exactly how tax-saving fixed deposits work, they also have ETE status. Some
people will compare with PPF which is EEE and there is no tax to be paid in any
case.
How
much corpus you can create by investing in Sukanya Samriddhi Account?
So how
much money you can accumulate in this scheme if you try to get the maximum
benefit from this scheme. Assuming you open the account the moment you girl
child is born, you will have complete 21 yrs in hand, and if you invest the
maximum permissible amount Rs 1,50,000 per year for 14 yrs (tenure allowed for investment)
. It can accumulate to approx amount of Rs 72 lacs after 21 yrs tenure. You
will have approx 55 lacs, by the time the girl turns 18 years. So in a way this
account can be meet your girl’s education and marriage expenses. You can
withdraw 45-50 lacs for education purpose and also have 25-30 lacs for marriage
expenses (try to focus more on education expenses rather than marriage).
Should
you open Sukanya Samriddhi Account for your daughter or not ?
If you
look at the features of this scheme, then you will realise that its very much
close to PPF features. The lock-in, interest rate, passbook facility, partial
withdrawal and taxation status very much mirrors PPF. So the real question is
if this is better than PPF? Or Recurring deposit? In my
opinion overall it’s a good initiative by government, its intention is pure and
something very much required, but it still does not beat PPF as the product. I
personally didn’t find any reason why I would prefer this scheme and not PPF?
However
when you look at this scheme, its much better than the traditional child
policies and child plans (non-equity) from insurance companies. I would
recommend this one over them.
Quite surprised by the update
knowledge of post office staff in a small town like Pataudi regarding this
scheme while the commercial banks in the area didn’t have any instructions
regarding SSA neither there customer care helpline.
Anyway
following is the procedure adapted by me :-
1)
Downloaded form from internet along with gazette notification
Note:- I had pasted photo on form on which it is written that photo is
optional but at post office they told me to give them two more photos. So be
prepared.
3) Please
check whether they had correctly written in pass book the name and
differentiate who is account holder (girl child) and who is depositor
(parent/guardian).
4) Please
deposit original birth certificate .Postal staff told me that there is no need
to deposit original certificate and photocopy will be sufficient. Being a Birth
and Death registrar earlier I know that wherever required Birth/Death
certificate should be original.You can take as many as certificates as you wish
from authorities by paying fee .
5) On the
day of opening account you cannot do other transaction as per staff but can
open account with any amount.
Overall
experience was very pleasant and efficient working of staff really make me
happy .
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