It is said that the future of a nation is in the hands of its children, with both boys and girls expected to play a major role in development. India is one such country with a huge potential for growth in the future, growth which is possible only through inclusive means. Women in India are often denied basic rights owing solely to their gender, making it hard for them to fully realise their potential. The Sukanya Samriddhi Scheme was launched with an aim to bridge the financial gap which had previously prevented women from achieving their best. This small savings scheme is the brainchild of Prime Minister Narendra Modi and has a vision to provide for the education and marriage needs of a girl child, offering her adequate opportunities to pursue her dreams.
This scheme offers a host of benefits, both to the girl child and her parents/legal guardians. Tax benefits under this scheme ensure that deposits aren’t too heavy on the wallet of a family, enabling them to continue with their normal way of life without additional burdens.
Tax Benefits under Sukanya Samriddhi Account(SSA)
Sukanya Samriddhi Yojana offers the following tax benefits to those enrolled in the scheme.
- Investments made towards this scheme are eligible for tax deduction under Section 80C of the Income Tax Act. This deduction is subject to a maximum of Rs 1.5 lakh towards this scheme.
- This scheme accrues interest which is compounded and credited to the account annually. This accumulated interest is exempt from taxes, ensuring that the funds grow to their maximum potential.
- The amount invested can be withdrawn on maturity or on closing the account. This amount is exempt from tax, ensuring that the girl child can utilise the amount in its entirety without having to pay tax on it.
These tax provisions ensure that both the depositor and the beneficiary enjoy tax exemptions, ensuring they can carry on with their lives without having to worry about taxes.
Tax Deduction Eligibility Criteria
The Sukanya Samriddhi Scheme allows provisions for one depositor to deposit money on behalf of the girl child. This depositor could either be a parent or a legal guardian. While contributions towards this scheme are eligible for tax deductions, only one depositor can claim tax exemptions under Section 80C of the Income Tax Act. This means that either a parent or a legal guardian can claim exemptions, not both.
Sukanya Samriddhi Scheme is a win-win for both the girl child and her parents/legal guardian, offering tax incentives to both, paving the way for a brighter future for the child.
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