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Government Promotes ‘Beti Bachao Beti Padhao’ Through Sukanya Samriddhi Yojana
In alignment with its commitment to the ‘Beti Bachao Beti Padhao’ campaign, the central government introduced the Sukanya Samriddhi Yojana (SSY) in 2015. This scheme aims to foster financial security for the girl child by accumulating funds over time, with the interest accrued upon maturity being exempt from income tax under Section 80C of the Income Tax Act.
Recently, during the declaration of interest rates for small saving schemes for the fourth quarter of the fiscal year, the government announced the SSY interest rate at 8.2 percent.
Financial Projections and Investment Strategies
The SSY interest rate is subject to change every quarter, but investors can anticipate a net return of approximately 8 percent at the time of maturity. For instance, if an individual commits to investing Rs.12,500 per month or Rs.1.50 lakh annually in an SSY account after the birth of their daughter, they could accumulate approximately Rs.69 lakh by the time she reaches 21 years of age.
Moreover, investors can claim income tax exemption on the Rs.1.50 lakh invested in the SSY account within a financial year under Section 80C of the Income Tax Act.
Investors have the option to start contributing to an SSY account immediately after their daughter’s birth, allowing for a 15-year investment window until the girl reaches 14 years of age. At this point, one can withdraw 50 percent of the maturity amount when the girl turns 18, with the remainder available upon her 21st birthday. Alternatively, investors may opt to withdraw the full amount once the girl reaches 21, if deemed appropriate.
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Tax Benefits Under Section 80C
As per the regulations outlined in Section 80C of the Income Tax Act, investors can claim income tax benefits on up to Rs.1.50 lakh invested in an SSY account within a single financial year. Furthermore, both the interest earned and the maturity amount from SSY are 100 percent tax-exempt, rendering the Sukanya Samriddhi Yojana an ‘EEE’ (Exempt-Exempt-Exempt) investment instrument.
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The Sukanya Samriddhi Yojana thus not only serves as a means to secure the financial future of the girl child but also offers substantial tax advantages for investors, reinforcing its position as a favored investment avenue under the ‘Beti Bachao Beti Padhao’ initiative.
