Securing your daughter’s future goes beyond simple saving—it requires selecting financial options that provide strong returns along with tax advantages. A highly effective savings option for securing a girl child’s future is the Sukanya Samriddhi Yojana (SSY).
Launched under the Beti Bachao Beti Padhao campaign by the Government of India, this scheme is among one of the best government savings schemes for securing the future of the girl child. Apart from long-term financial support, the scheme offers substantial tax relief, making it a favourite among Indian families.
Let’s explore in detail the tax benefits of Sukanya Samriddhi Yojana, its eligibility criteria for deductions, and why it stands out as a tax-saving investment.
What Is the Sukanya Samriddhi Yojana?
The Sukanya Samriddhi Yojana (SSY) is a government-supported savings plan introduced to encourage parents and guardians to set aside funds for their daughter’s future education and marriage-related needs. A Sukanya Samriddhi Yojana account can be opened for any girl child below the age of 10, and the account remains active for 21 years from the date of opening.
Tax Benefits of Sukanya Samriddhi Yojana
One of the biggest attractions of the SSY deposit is its EEE (Exempt-Exempt-Exempt) status, meaning three layers of tax exemption are provided under the scheme:
1. Deduction on Investment (Exempt-1)
Under Section 80C of the Income Tax Act, the amount invested in the SSY account is eligible for deduction. You can claim a deduction of up to ₹1.5 lakh per financial year. This significantly reduces your taxable income and helps in annual tax savings.
However, do note that these deductions are not available if you opt for the new tax regime introduced in recent years.
2. Interest Is Tax-Free (Exempt-2)
The interest earned on the SSY deposit is completely tax-free under Section 10 (11A) of the Income Tax Act. The interest is compounded annually, meaning your savings grow faster, and you don’t have to pay any tax on that growth.
3. Tax-Free Maturity Proceeds (Exempt-3)
Upon the maturity of the Sukanya Samriddhi Yojana account—after 21 years from the date of opening—the entire maturity amount (principal + interest) is also exempt from income tax. This means that the full corpus built over the years can be used for your daughter’s higher education or marriage without any tax burden.
Even if partial withdrawal is made when the girl turns 18, the withdrawn amount (up to 50% of the balance) is tax-free, provided it’s used for education or marriage and supported by proof.
Eligibility Criteria for Tax Deduction in SSY
- The SSY account must be opened in the name of a girl child below 10 years of age.
- The account must be operated by a parent or legal guardian.
- Only one account per girl child is permitted.
- The same depositor (parent/guardian) who makes the deposit is eligible to claim the deduction under Section 80C.
- A maximum of two accounts per family are allowed, except in the case of twins or triplets.
These conditions are designed to ensure the scheme is used fairly and for its intended purpose—supporting the financial future of girl children in India.
Additional Features That Add Value
- Low initial investment: You can start with as little as ₹250 per year, with a maximum deposit of ₹1.5 lakh annually.
- Deposit for only 15 years: You only need to make deposits for 15 years. The account continues to earn interest until it matures after 21 years.
- Flexible payment and revival: If you miss a year, the account can be revived by paying a small penalty of ₹50 per year of default and the minimum annual deposit.
Use of Sukanya Samriddhi Calculator
To plan better, families can use the Sukanya Samriddhi Yojana Calculator available online. It helps in:
- Estimating the total maturity amount
- Projecting yearly returns
- Calculating tax savings
- Determining the maturity date
Conclusion
The tax benefits of SSY scheme make it more than just a savings plan—it’s a holistic tool for financial planning. With deductions under Section 80C, tax-free interest, and exempt maturity proceeds, this scheme is a rare example of triple tax exemption.
It also helps promote savings discipline and secures a stable financial future for your daughter. For anyone looking for the best government savings schemes that combine safety, high returns, and tax efficiency, the SSY deposit is a compelling choice.
