The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Anjani Sinha, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.
On the 28 of February, 2015, The Business Today published news of Sukanya Samriddhi Scheme .This scheme will encourage people to save for their daughters’ education and marriage .It would enable parents to open accounts in the name of their girl child up to the age of 10 years. Post office and some commercial bank are providing this facility .The cap for the deposit is 1.5 lakh with a minimum of Rs.1000 every year.
Some people are taking this as an opportunity to save taxes .The reason behind such a thought has come from the fact that the scheme has been exempted from income tax. Also, the interest of 9.1% offered is higher as compared to the 8.7% on normal Public Provident Fund.
But, on further analysis, we will observe that the scheme is not so effective in tax exemption. The scheme will not benefit the 30% bracket tax payers. Other schemes like the Employee provident Fund, Life Insurance Premium equally meet the 1.5 lakh limit. Other instruments like National Saving Certificate, and expenses on children tuition fee are already part of 80C.
This scheme is very similar to PPF providing higher interest rates but very less flexibility. There is no online mode of payment .In present scenario, where net banking has become essential, such a payment mode will not fascinate many.
Clause of withdrawal ,seems to be very rigid .The account holder cannot withdraw the amount before the girl child turns 18 .Only a partial withdrawal of 50% would be allowed ,in case of financial requirement.
So, overall this scheme does not seem to be an extraordinary one!!!!
References:
vgsomnews 