As per Section 80C of the Income Tax Act, investments made towards the Sukanya Samriddhi Yojana account is eligible for tax exemption. This government-backed scheme was introduced to provide financial coverage and security to an Indian girl child.
This scheme can be availed only by the parents or a legal guardian of a girl who is below the age of 10 years. Depositors can take the assistance of an online monthly interest calculator to estimate the maturity amount.
Even though two parents or legal guardians can deposit in a Sukanya Samriddhi account, only one of them can claim tax exemptions. The annual accrued interest which is compounded annually is also exempt from taxation. Hence, this helps the deposited amount to grow without any deductions.
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The income tax deductions under Section 80C for investments made towards the SSY account is subject to a maximum limit of Rs.1.5 lakh annually.
Sukanya Samriddhi Yojana also provides other benefits, which comprise an easy online application process, a minimum deposit of Rs.250, attractive interest rates, multiple payment methods, etc.
Owing to the long-term lock-in period of SSY accounts, individuals can opt for alternative plans. For example, fixed deposits come with flexible investment tenors and liquidity in case of financial emergencies.
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