Income tax exemption and 80C benefits of Sukanya Samriddhi Account was not considered while launching the scheme. However after some time Govt. has declared that deposit under SSY scheme is eligible for section 80C deduction.
Now one can save income tax by depositing money in this small savings scheme. The maximum amount deposited under this scheme is 1.5 lakh. That means you can consume the entire spread of section 80C of income tax, if you have not done any other investments. Now is the interest taxable or not?
Sukanya Samriddhi Account with 80C Benefits
There are many questions about this scheme like: Is interest on this account taxable? Is the maturity amount taxable? What is the rule for Sukanya Samriddhi Yojana deduction u/s 80C ?
For your information the rate of interest is not fixed. Interest rate for 2016-17 is revised to 8.6% from last year’s 9.1%. Let’s check out the 80C and other income tax benefits.
- One can get tax exemption of the deposited money under section 80C of income tax act 1961.
- The interest earned on this scheme on long term will not be taxable. After budget 2015 Sukanya Scheme has been declared as EEE scheme.
- The maturity value of the amount after 21 years is not taxable. You can calculate the maturity amount of this scheme.
How much can you save with 80C Benefits of Sukanya Samriddhi Yojana?
Another part of income tax benefits is, one can save huge tax amount by depositing in the SSA. Let’s check out how much one can save in reality by investing in this account:
- For 10% bracket 15,000 amounts can be saved
- For 20% bracket 30,000 amounts can be saved
- For 30% bracket 45,000 amounts can be saved
Let’s consider about people with 10% bracket. If you deposit 1.5 lakh in one year then you can save 15,000 income taxes. Nothing new in this as this is applicable for any scheme under section 80C. The good thing is that the net yield every year might be 8.6% (current FY interest rate) in that case.
How to avail Tax Exemption under Section 80C?
As you know, one can open an account under this scheme in the name of a girl child. You can avail 80C tax benefits on the deposited amount. You can mention about the contributed amount so that the same amount can be deducted from your tax due.
Also Check: List of banks to open Sukanya Samriddhi Account
Section 80C is already crowded with so many tax saving options. Now the rule for Sukanya Samriddhi Yojana 80C is another entry. Finance Minister might think to increase the limit of section 80C so that one can utilize these schemes to get maximum benefit.
You can open an account in post office or bank by visiting your nearest branch with the documents required for Sukanya Samriddhi Account.
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