With the new budget coming into picture, the much popular Sukanya Samriddhi Account has been made fully tax free. This simply implies that this scheme would turn out to be tagged as EEE, which means (Exempt, Exempt, Exempt) Investment Avenue as per section 80C, which would be similar to Public Provident Fund.
The world is making progress in all spheres, however, in India, in most of the families; a girl child is considered more of a burden than a blessing due to the fact that a lot of money goes in while getting them married. Sukanya Samriddhi Account would ensure security for the parents as well as girl child and would certainly ease out such mental blockages and would promote parents to have girl child and thus put a check to female feticide.
What the Budget 2015-16 says about Sukanya Samriddhi Account Tax Benefits?
When Sukanya Samriddhi Account was launched in January 2015, a lot of people were not sure about various aspects of this scheme. However, with the new budget in place, various benefits associated with Sukanya Samriddhi Account has certainly come as a pleasant surprise to the parents and guardians of the girl child.
Contribution 0f Sukanya Samriddhi Account to be exempted in 80C
Up to a maximum limit of Rs 1.50 lakh per annum, the contribution, whatever amount invested in Sukanya Samriddhi Account, would be exempted under 80C and would thus serve as a major tax saving options for parents of a lot many girl children across the country.
The contributions have been exempted by the government to ensure that more and more people invest into it in maximum amount and thus ensure a better financial future for their girl child along with getting the tax benefits.
Interest too to be tax exempted in Sukanya Samriddhi Account
Not only the principal investment, but even the interest that theSukanya Samriddhi Account earns per year would be tax exempted under this scheme. Hence, there would be no need for the parents to add interest onSukanya Samriddhi Account investment in their income while paying taxes.
Nothing could be more welcoming that this feature. As a matter of fact, no other saving scheme offers such a high rate of interest and if that interest too is made tax exempted, we guess that Indian citizens could not ask for more.7
|Your Contribution||Can be claimed under section 80C|
|Interest Earned in SSA||Is Completely Tax Free|
Maturity amount would also be tax exempted in Sukanya Samriddhi Account
Whatever amount accumulates after the maturity of this scheme would also be entirely free from taxes. Whether the amount is withdrawn after 18 years of age of the girl or after 21 years or later would be exempted from income tax.
How is Sukanya Samriddhi Account different in this new budget?
Before the Budget 2015-16 came into effect, the investment made under Sukanya Samriddhi Account was tax free, however the interest earned on the account was taxable. With the new budget in place, even the interest becomes tax free and that puts this noble scheme under the EEE scheme.
What does Sukanya Samriddhi Account have for you
Sukanya Samriddhi Account is launched for parents who could not afford to accumulate the right amount of money for their daughter’s marriage and education. With this new scheme, anyone can afford to deposit atleast Rs 1,000 to Sukanya Samriddhi Account and get the accumulated amount after she turns old for higher education or marriage.
In fact, even people living below poverty line can afford this minimum amount per year. In case of lower middle class families, which comprise of the major population of India, even investing Rs 1,000 monthly or Rs 12,000 annually would not be a big deal. All contributions and decent interest put together for 21 years would be a remarkable amount for the future of girl children.
Sukanya Samriddhi Account is a scheme centric to specific social cause
As we all know, the fate of girl child is not really good throughout the country with situation being worse in North Indian states like Haryana, where the sex ratio is much below the national sex ratio. It was high time that government should intervene in this social problem and bring up something that eases out the mental blockages of parents.
Overall, this is considered to be one of the best schemes for the parents of girl child since it is not only a flexible deposit scheme, but is secure and completely tax free. Although, the returns are not as high as equity market, but anyone who wants a secure future for their daughters would be more than interested to invest in Sukanya Samriddhi Account.