Finance minister, Arun Jaitley has made interest income and withdrawal from Sukanya Samriddhi Scheme tax-free.
In his Budget speech on Saturday, the Finance Minister said, "Investments in Sukanya Samriddhi Scheme is already eligible for deduction under Section 80C. All payments to the beneficiaries including interest payment on deposit will also be fully exempt."
Sukanya Samriddhi Scheme is a new entrant in the small-savings schemes category aimed at encouraging savings for a girl child's education and marriage. The scheme was announced by the finance minister in his previous budget in July 2014 and the scheme was launched in January this year.
Under the scheme, parents and legal guardian can open accounts in the name of maximum two girl children up to 10 years of age. However, as part of the initial offer one year of grace period is being given. Any girl child born between 2 December 2003 and 1 December 2004 can open account up to till 1 December 2015.
The account can be opened in post office or scheduled commercial banks with a minimum investment of Rs 1,000 a year, and thereafter any sum in the multiple of Rs 100.
One has to invest at least Rs 1,000 a year. A maximum deposit of Rs 1.5 lakh is allowed under the scheme, irrespective of the number of accounts.
One has to deposit at least a sum of Rs 1,000 every year. An account where the minimum annual amount of Rs 1,000 is not deposited, the same can be revived by paying a penalty of Rs 50 and the minimum deposit amount for each year during which the account holder has failed to pay.
The scheme is currently offering an interest of 9.1% a year compounded annually. However, the rate is not fixed and would be revised every year. The interest would be credited in the account every year.