RBI issued Gold Monetisation Scheme norms

RBI issued Gold Monetisation Scheme norms

Advance against Pledge of Gold jewellery /ornaments

Advance against Pledge of Gold jewellery /ornaments

Tips before buying car insurance

Tips before buying car insurance

Investor Education Rule 7 - Do not be greedy

section 14A Expenditure incurred for exempt income

section 14A Expenditure incurred for exempt income

Draft Rules on Land Acquisition Act

Draft Rules on Land Acquisition Act

Obtaining BAR Code and its Applicability

BAR Code: A Coding of your Product: Procedures for Obtaining BAR Code and its Applicability on Business Houses

Bar Coding is a series of parallel vertical lines (bars and space), that can be read by bar code scanners. When scanned by a bar code scanner, the black bars and spaces are decoded to reveal a specific 12 or 13 digit long sequence of numbers (the ‘barcode number’)

WHY TO USE BAR CODE:

RBI cautions public on writing on watermark of banknotes

INSCRIBING ON BANK NOTES – RBI's ADVISORY THEREON

PRESS RELEASE : 2015-2016/152, DATED 16-7-2015

It has been brought to the notice of Reserve Bank of India that members of public and institutions write number, name or messages, etc. on the watermark window of banknotes, thus defacing the banknotes. The watermark window has an important security feature which distinguishes it from a counterfeit note. Any defacement on the window will not allow the common man to identify one of the features of a genuine note. The public is, therefore, requested to refrain from doing anything that leads to defacement.

'Liberalised Remittance Scheme' : FAQ for Indian Traveller

RBI issues FAQs on Forex facilities and 'Liberalised Remittance Scheme' for residents

July 11, 2015

Are you planning to travel abroad and you are not sure how much foreign exchange can you buy when travelling on private visits to country outside India? You are not sure as how much foreign currency can be carried in cash for travelling abroad? You want to know how much Indian currency can be brought in while coming into India?

Now RBI has released FAQs in respect of Forex facilities including Liberalized Remittance Scheme for general guidance and to answer these type of queries. Certain FAQs are highlighted as under:

Q. How much foreign exchange can one buy when traveling abroad on private visits to a country outside India?

For private visits abroad, other than to Nepal and Bhutan, any resident can obtain foreign exchange upto an aggregate amount of USD 2,50,000, from an Authorised Dealer or Full-Fledged Money Changers (FFMCs), in any one financial year, irrespective of the number of visits undertaken during the year.

This limit has been subsumed under the Liberalised Remittance Scheme w.e.f. May 26, 2015. If an individual has already remitted any amount under the Liberalised Remittance Scheme in a financial year, then the applicable limit for travelling purpose for such individual would be reduced from USD 250,000 by the amount so remitted.


Q. How much foreign currency can be carried in cash for travel abroad?
i. For travelers proceeding to Iraq and Libya, the limit is upto USD 5000

ii. For travelers proceeding to Islamic republic, the limit is upto USD 25000

iii. For travellers proceeding for Haj/Umrah pilgrimage, the limit of forex is full amount of Basic Travel Quota entitlement (USD 250, 000) in cash as specified by the Haj Committee of India

iv. In case of travel to all countries other than above, the limit is upto USD 3000 in currency/coins and balance in form of travellers cheque or banker’s draft.

Q. How much Indian currency can be brought in while coming into India?

i. If returning from Nepal/Bhutan, the limit of Indian currency which can be brought into is upto USD 25,000 in Denomination not exceeding of Rs. 100

ii. Any person resident in India who had gone to Pakistan and/or Bangladesh on a temporary visit, may bring into India at the time of his return, currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs. 10,000 per person

iii. Any person resident outside India, not being a citizen of Pakistan and Bangladesh and also not a traveller coming from and going to Pakistan and Bangladesh, and visiting India may bring into India currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs. 25,000 while entering only through an airport.

Q. What is the Liberalised Remittance Scheme (LRS) of USD 2,50,000 ?

Under the LRS, all resident individuals, including minors, are allowed to freely remit upto USD 2,50,000 in financial year for any permissible current or capital account transaction or a combination of both.

Further, resident individuals can avail of foreign exchange facility for the purposes mentioned in Para 1 of Schedule III of FEM (CAT) Amendment Rules 2015, within the limit of USD 2,50,000 only. If an individual has remitted any amount under LRS in a financial year, then the applicable limit for such individual would be reduced from USD 250,000 by the amount so remitted. In case of remitter being a minor, the LRS declaration form must be countersigned by the minor’s natural guardian.

No penalty if credit card dues are paid within 3 days from the due date: RBI

 RESERVE BANK OF INDIA _________________ www.rbi.org.in

 RBI/2015-16/126 

DBR.No.BP.BC.30/21.04.048/2015-16

July 16, 2015 

All Scheduled Commercial Banks/Non-Banking Financial Companies/Primary (Urban) Co-operative Banks 

Dear Sir, 

Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances – Credit Card Accounts 

1.Please refer to circular DBOD.No.BP.BC.78/21.04.048/2013-14 dated December 20, 2013 on the captioned subject.

 2. In order to bring in greater credit discipline as also to provide operational flexibility to credit card issuers, it has been decided that, with effect from the date of this circular, ‘past due’ status of a credit card account for the purpose of asset classification would be reckoned from the payment due date mentioned in the monthly credit card statement. Consequently, in case of banks, a credit card account will be treated as non-performing asset if the minimum amount due, as mentioned in the statement, is not paid fully within 90 days from the payment due date mentioned in the statement.

 3. However, banks shall report a credit card account as ‘past due’ to credit information companies (CICs) or levy penal charges, viz. late payment charges, etc., if any, only when a credit card account remains ‘past due’ for more than three days. The number of ‘days past due’ and late payment charges shall, however, be computed from the payment due date mentioned in the credit card statement. Yours faithfully,

 (Sudarshan Sen) 

Chief General Manager-in-Charge

Tips to Secure Bank Account

>> Exercise caution when receiving unsolicited, unexpected, or suspicious emails

>> Keep anti-virus software and operating systems up to date

>> Enable advanced account security features, like two-step verification of credentials, if available

>> Create strong passwords for all your accounts

>> Enable account login notifications, if available

>> Always log out of your online banking session when finished

>> Monitor bank statements regularly for suspicious activity

>> Notify your financial institution of any strange behaviour you notice while using their service 

Pradhan Mantri Suraksha Bima Yojana

What is Pradhan Mantri Suraksha Bima Yojana?

Pradhan Mantri Suraksha Bima Yojana is a government-led accident insurance schemes that aims to provide accident insurance to all Indians in the unfortunate event death or permanent disability on account of an accident. This scheme is applicable for Indians under the organized as well as unorganized sector of labour. The scheme is linked to various public sector banks and units and major private banks also who have agreed to collaborate.

In a country like ours, where insurance percentage is even below the world average of 6.3%, schemes like the PMSBY are a great push towards insuring a huge chunk of population. Some of the main distinguishing features that set it apart from other such government-run insurance schemes are –

Extremely low premium payment

Higher coverage of up to Rs.2 Lacs

First time when social-security schemes have been linked with bank accounts to help unorganized sector be a part of the scheme and to foster deeper penetration across the country 

Higher inclusivity; both unorganized and organized sector people can avail this policy

• 
  

What are the Salient features of Pradhan Mantri Suraksha Bima Yojana ?

How to Secure Old age in India ?

Introduction

After successful launch of Jan Dhan Yojana, Prime Minister Modi had last week launched the ‘Pradhan Mantri Jivan Jyoti Bima Yojana’, ‘Pradhan Mantri Suraksha Bima Yojana’ and the ‘Atal Pension Yojana’ in Kolkata; another step forward to secure more population under their financial inclusion programme.

Objective of schemes

Best Investment : Public Provident Fund

PPF is money that will be yours forever.

Knowledge of the different features of the PPF account will help you when you want to take a loan against the account, withdraw from the account, re-activate a discontinued account etc.

Here an attempt is made to introduce you all features of PPF.

What is PPF?

Public Provident Fund (PPF) is a scheme of the Central Government, framed under the PPF Act of 1968. Briefly, PPF is a government backed, long-term small savings scheme which was initially started by the Government in order to provide retirement security to self-employed individuals and workers in the unorganized sector. Today the PPF is the Indian citizens’ darling investment avenue.

GOLDEN RULES FOR INVESTING WHEN INTEREST RATES ARE LOW

GOLDEN RULES FOR INVESTING WHEN INTEREST RATES ARE LOW

■ 1. Paying off debt may be your best investment, and low interest rates help you pay off loans faster.

■ 2. Know your tolerance to risk. “If you’re moving out of bank deposits you are taking on more risk,” 

■ 3. Don’t keep all your eggs in one basket. Spread your money across different types of assets to reduce your overall risk.

Learn How to create Wealth

 The gift of creating wealth:

To become really good at handling money and getting out of debt and getting on the road to becoming wealthy, read one or more of favorite financial books :

“I Will Teach You To Be Rich” by Ramit Sethi: This book is hugely popular with millennials and anyone who wants to learn more about personal finance without the boring parts. Sethi’s easy-to read and approachable style includes chapters like how to “Open high interest, low hassle accounts and negotiate like an Indian,” or “How to save hundreds per month (and still buy what you love.)”

“The Millionaire Next Door” by Thomas J. Stanley and William D. Danko: This book is a great guide to the habits that build wealth. Based on the principal that wealthy people didn’t become wealthy by acting that way, Stanley and Danko lay out the seven simple rules to follow to become wealthy.

It’s a must read for anyone just starting out and earning his first real paycheck because it teaches the basics of personal finance and helps the reader to develop good money habits right from the start.

“You’re So Money: Live Rich Even When You’re Not” by Farnoosh Torabi: Weaning off benevolent benefactors (parents, that’ you) and learning to live on an entry-level income, may come as a big shock to your grad’s preferred lifestyle. But if your graduate doesn’t learn to live within his means, especially when just starting out, he may quickly rack up even more debt on those new credit cards.

Torabi, a savvy financial reporter and 20-something herself, gives grads sensible advice to help them successfully adjust to their new disposable income level, and still enjoy some of the finer things in life.

“Why Didn’t They Teach Me This in School?: 99 Personal Money Management Principles to Live By” by Cary Siegal: The author originally wrote this book to pass on good money management skills to his five children. Since most high schools and colleges do not teach students even the basics of money management, this book features eight important lessons focusing on 99 principles that will quickly and memorably enhance any individual’s money management acumen. I like this book because it’s easy to understand and the principles are ready to use.

Atal Pension Yojana (APY)

Atal Pension Yojana (APY) 

1. Introduction

1.1 The Government of India is extremely concerned about the old age income security of the working poor and is focused on encouraging and enabling them to join the National Pension System (NPS). To address the longevity risks among the workers in unorganised sector and to encourage the workers in unorganised sector to voluntarily save for their retirement, who constitute 88% of the total labour force of 47.29 crore as per the 66th Round of NSSO Survey of 2011-12, but do not have any formal pension provision, the Government had started the Swavalamban Scheme in 2010-11. However, coverage under Swavalamban Scheme is inadequate mainly due to lack of guaranteed pension benefits at the age of 60.

1.2 The Government announced the introduction of universal social security schemes in the Insurance and Pension sectors for all Indians, specially the poor and the under-privileged, in the Budget for the year 2015-16. Therefore, it has been announced that the Government will launch the Atal Pension Yojana (APY), which will provide a defined pension, depending on the contribution, and its period. The APY will be focussed on all citizens in the unorganised sector, who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA). Under the APY, the subscribers would receive the fixed minimum pension of Rs. 1000 per month, Rs. 2000 per month, Rs. 3000 per month, Rs. 4000 per month, Rs. 5000 per month, at the age of 60 years, depending on their contributions, which itself would be based on the age of joining the APY. The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by any subscriber under APY would be 20 years or more.  The benefit of fixed minimum pension would be guaranteed by the Government. The APY would be introduced from 1^st June, 2015.

2. Benefit of APY

Can Individual have two PPF Account ?

What if an Individual have two PPF Account in his/her name? 

An individual can open only one account in his name either in the post office or in the bank and he has to declare this in application form for opening the account. Persons having a PPF account in the bank cannot open another account in the post office and vice-versa. Only one account can be opened in one name. If two accounts are opened by the subscriber in his name by mistake, the second account will be treated as irregular account and will not carry any interest unless the two accounts are amalgamated with the approval of the Ministry of Finance (DEA). For this purpose the subscriber will have to write to the Under Secretary-NS Branch MOF (DEA), New Delhi-1 through the Accounts Office giving detail of each account. 

Who are allowed to Open PPF account on behalf of a minor

A Public Provident Fund account on behalf of a minor can be opened by either father or mother. Both the parents cannot open a separate account for the same minor. An individual may open one PPF account on behalf of each minor of whom he is the guardian. [MOF (DEA) letter No 7/34/88-NS II dated 17.11.1989] The grand father/mother cannot open a PPF account on behalf of their minor grand son/daughter when parents of the minor are alive. They can open the account if they are appointed as legal guardian after the death of the parents. Under the rules only father or mother can open a PPF account on behalf of minor son/daughter. If neither parent is alive or where the only living parent is incapable of acting, a person entitled under the law for the time being in force to have care of the property of minor can open a PPF account on behalf of the such a minor.

 [DG Posts letter No. 1-23/75-SB dated: 8.2. 1979] 

Best Personal Finance Journalists to Follow

Jean Chatzky

Because she came into the world of personal finance as a journalist, not as a financier, Jean Chatzky asked questions, got answers and gained firsthand her own expert sense of financial literacy that she now works to impart on others. One of personal finance’s most recognized faces on TV, the web and in print, Chatzy’s bibliography includes “Money 911,” “Make Money, Not Excuses” and “The Ten Commandments of Financial Happiness.”

Cameron Huddleston

Huddleston is a familiar face to Kiplinger readers, as the author of the site’s award-winning “Kip Tips” column — a daily tackling of new money problems or issues in a pragmatic, enlightened way. According to Huddleston, many Americans might not earn the financial success they want because of a lack of planning and literacy. Setting financial goals, she says, is the answer.

Universal Account Number (UAN)- EPFO

Frequently Asked Questions  For Members

Q.1 What is UAN?

A.1 UAN stands for Universal Account Number to be allotted by EPFO. The UAN will act as an umbrella for the multiple Member Ids allotted to an individual by different establishments. The idea is to link multiple Member Identification Numbers (Member Id) allotted to a single member under single Universal Account Number. This will help the member to view details of all the Member Identification Numbers (Member Id) linked to it. If a member is already allotted Universal Account Number (UAN) then he / she is required to provide the same on joining new establishment to enable the employer to in-turn mark the new allotted Member Identification Number (Member Id) to the already allotted Universal Identification Number (UAN).

Q.2 How do I get my UAN?

How to Change name of depositor in PPF Account

(1) When a depositor changes his name, e.g. on adoption or otherwise or in the case of female depositor, on marriage, the depositor should be required to intimate the fact in writing to the post office and produce the pass book of the account.

The intimation should bear the depositor’s signature with the old as well as with the new name, and the depositor should also be required to sign a fresh application form with the new name.

 The depositor’s signature as written with the old name on the intimation should be compared with the specimen on record. 

The depositor’s new name should be written clearly in red ink in the pass book and the ledger card above the entry of the old name which should be penned through in such a manner as to leave it still legible.

The corrections in the ledger card and the pass book should be supported by the entry “Vide depositor’s intimation dated _____” which should be initialed and dated by the Postmaster. The pass book should then be returned to the depositor.

The number of the account should be written at the top of the intimation which together with the old application card/form should be kept in a guard file.

 (2) In sub offices one specimen of the new signature should be taken. The intimation with the fresh application form should be forwarded to the head office entered in the list of documents. The new specimen signature obtained from the depositor should be pasted in the S.S. Book over the old specimen in such a manner as to allow inspection of the old specimen signature. Suitable corrections should also be made in the sub office ledger in the manner prescribed above. 

[Rule 72(1) of P.O.S.B. Manual Volume I] 

Note:- The above procedure applicable to P.O. Savings Accounts can also be applied to PPF accounts. The fresh application form in Form A and nomination form in Form E applicable to PPF accounts will be taken from the subscriber. Depositor will also required to submit all the documents related his Change of Name to Complete KYC Formalities. 

How to withdraw amount from PPF Account

(i) Anytime after the expiry of 5 years from the end of the financial year in which the initial subscription for Public Provident Fund (PPF) Account was made, the subscriber may withdraw 50% of the balance to his credit at the end of 4th year immediately preceding the year of withdrawal or the amount at the end of the preceding year whichever is lower. However, not more than one withdrawal is permitted in one financial year. 

(ii) A PPF subscriber may withdraw the entire amount standing to his credit, after the expiry of 15 years form the end of the financial year in which the initial subscription was made. He/She may, also, opt to continue with the scheme by subscribing for a further block of 5 

years by applying to the deposit offices in Form- H before the expiry of one year thereafter. 

(iii) A PPF subscriber may also avail of this facility for a further block of 5 years on the expiry of 20 years (or on expiry of 25 years and so on) from the end of the year in which the initial subscription was made. However, if a subscriber continues to deposit after 15 years without submitting Form H, he shall not be eligible to enjoy benefits under Section 80-C of I.T.Act. These deposits will be treated a irregular and will not earn interest.

(iv) During the extended period of 5 years, a PPF subscriber is eligible to make partial withdrawal not exceeding one in every financial year subject to the condition that total withdrawal during the 5 years shall not exceed 60% of the balance to his credit at the commencement of the period.

 (v) Even if the PPF subscriber does not wish to make any further subscription, the balance in his credit shall continue to earn interest

Best Finance And Budgeting Apps

Best Finance and Budgeting Apps

1. Acorns

The acorns in this mobile investment app are pieces of spare change that can sprout into fruitful finances. Use it to link your debit or credit card; Acorns will round each transaction you make up to the next dollar amount and deposit the change into your index fund of choice. Acorns will even automatically balance and manage your portfolio for you.

2. CNBC

Ignorance means being broke, not blissful, when you’re not informed of the latest business and financial news. Downloading the CNBC app on your smartphone (it has iOS and Android compatibility) means quick access to breaking finance info, streaming programming, interactive stock market watch lists and more.

3. Mint

The Mint app offers easy and convenient organization of your bank accounts, credit cards and other finances, emailing you when bills are upcoming or if you’re approaching your credit limit. The app also recognizes when you’ve transferred funds, closed an account or opened a new one.

4. RetailMeNot

Never pay full price for anything ever again with mobile access to thousands of searchable promo codes, discounts and coupons — you can also check out which deals are currently trending and bookmark your favored retail locations throughRetailMeNot.com.

5. Yahoo! Finance

Beat the market and feel like you’re standing on the Wall Street trading floor with Yahoo! Finance’s mobile app, which tracks, follows and updates your stocks to build your investing savvy. Build a list of your top picks, sync them up and follow minute-by-minute updates on the performance of your portfolio. Access to investment and trading news is just as quick.

6. LearnVest

iPhone and iPad owners who want a user-friendly personal finance mobile portal can download the app version of the popular LearnVest website. You’ll get the articles and content LearnVest is known for, but also interactive features like programs to organize and maximize your funds, track your assets, see your debt and net worth, and work toward savings goals.

Rate of Interest WEF 01.04.2015 on NSC, PPF, KVP, Sukanya Samriddhi A/c

Rate of Interest WEF 01.04.2015 on NSC, PPF, KVP, Sukanya Samriddhi A/c 

Government Announces Interest Rates for Various Small Savings Schemes; Rates to Come Into Force with Effect from Tomorrow

It was decided by the Government of India that interest rates on Small savings Schemes will be linked to yields on government securities of comparable maturity. In pursuance of that decision, the Government has decided to revise the rates applicable on various small savings schemes as given in the table below.

Scheme	Rate of interest w.e.f.01.04.2014	Rate of Interest w.e.f. 01.04.2015
1.	2.	3.
Savings Deposit	4.0	4.0
1 Year Time Deposit	8.4	8.4
2 Year Time Deposit	8.4	8.4
3 Year Time Deposit	8.4	8.4
5 Year Time Deposit	8.5	8.5
5 Year Recurring Deposit	8.4	8.4
5 Year SCSS	9.2	9.3
5 Year MIS	8.4	8.4
5 Year NSC	8.5	8.5
10 Year NSC	8.8	8.8
PPF	8.7	8.7
Kisan Vikas Patra	8.7	8.7
Sukanya Samriddhi Account Scheme	9.1	9.2

The above rates will be effective from tomorrow i.e. 1.4.2015.

Thus the rates on many of the small savings scheme have undergone an upwards revision vis-à-vis 2014-15.

How to Make Happy Retirement life .....

How you spend your money in retirement will determine your happiness

How you can maximise your happiness through your spending patterns are:

* Instead of buying one big luxury item once, you will derive more satisfaction if you spend on small luxuries more often.

* Regularly spend small amounts on people such as your grandchildren, instead of buying them expensive gifts only once or twice a year.

* Take advantage of experiences that cost very little or nothing, such as hiking or going on a picnic with your grandchildren. Experiences are more satisfying than things, because the memories last longer and have more meaning.

* Delay purchases. The anticipation will increase the enjoyment and postpone spending.

How To Spend : Hierarchy of need

People do not live according to Hierarchy of needs, because living in an unequal society has a psychological impact on spending habits. For example, retirees may not eat nutritious food, but they avidly watch television or spend money on things that satisfy higher-level needs. Ideally, they should focus on meeting their lower-level needs first.

1 Physical needs: Your first priority is to have food, accommodation and access to basic health care.

2. Safety: You must be able to protect yourself, your assets and your income. This requires spending on, among other things, homeowner’s insurance and medical scheme cover, and having enough savings to provide a basic level of income if you live longer than expected.

3. Belonging: We have a need to belong to a social group, such as a family or a community that shares our beliefs or interests. At this level of the hierarchy, you spend on other people, such as your family, and on entertainment and luxuries.

4. Esteem: We want to be valued by others. This may involve spending on things that make you feel good about yourself, such as hobbies and sport.

5. Self-actualisation: This may require spending on philanthropic causes, to help those in need.

How to start Business in India?.... Make in India

Business in India : Make in India

Register at www.ebiz.gov.in for availing various government online services such as industrial license, MCA name availability, PAN, TAN, MCA DIN, IEC etc.

Pan-India Services

•Industrial Licence •Industrial Entrepreneur Memorandum •Employer Registration with ESIC •Certificate of Incorporation •Reporting of FC-GPR •Reporting of Advance Foreign Remittance •MCA Name Availability •Issue of Tax Deduction & Collection Account Number •License for Possession and Sale or Possession and Use of Explosives •MCA Director Identification Number •Issue of Permanent Account Number-UTIITSL •Certificate for Commencement of Business •Issue of Permanent Account Number-NSDL •Employer Registration with EPFO •Issue of Importer Exporter Code

Update Aadhaar Card online

Change mobile number in Aadhaar. If using registered mobile, update online at https://ssup.uidai.gov.in/web/guest/ssup-home or visit nearest permanent enrolment centre.

Sukanya Samridhi Yojna 2014 of India

Prime Minister Narendra Modi has Launched Sukanya Samridhi Yojna’ (girl child prosperity scheme) with the vision to provide for Girl Child Education and Her Marriage Expense. 

Sukanya Samriddhi Account Scheme is a small deposit scheme for girl child, as part of ‘Beti Bachao Beti Padhao’ campaign, which would fetch yearly interest rate of 9.1 per cent and provide income tax deduction Under section 80C of the Income Tax Act,1961.

Date of Commencement of Scheme- Sukanya Samriddhi Account Scheme is been notified by Ministry of Finance vide Notification No. G.S.R.863(E) Dated 02.12.2014. 

Click for Rules : Notification No. G.S.R.863(E) Dated 02.12.2014. 

Shceme become operational by notification of rules namely ‘Sukanya Samriddhi Account Rules, 2014’.

Depositor- For this scheme Depositor is an individual who on behalf of a minor girl child of whom he or she is the guardian and deposits amount in account opened under this scheme.

Who can be ‘Guardian’ under this Scheme – In relation to a minor girl Child Guardian means

(i) either father or mother; and

(ii) where neither parent is alive or is incapable of acting, a person entitled under the law for the time being in force to have the care of the property of the minor.

One Girl One Account- Depositor cannot open multiple or more than one account in the name of a Girl Child.

Can be opened for Maximum two girls – Natural or legal guardian of a girl child   allowed to open one account each for two girl children’s.

Account opening for third Girl – Under this scheme natural or legal guardian of the girl child shall be allowed to open third account in the event of birth of twin girls as second birth or if the first birth itself results into three girl children, on production of a certificate to this effect from the competent medical authorities where the birth of such twin or triple girl children takes place.

Age Restriction for Opening of Account- The account may be opened by the natural or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of ten years and any girl child, who had attained the age of ten years, one year prior to the commencement of these rules shall also be eligible for opening of account under these rules. Scheme is been commenced from 02.12.2014.

Image courtesy of David Castillo Dominici at FreeDigitalPhotos.net

Documents to Open the Account- Birth certificate of a girl child in whose name the account is opened shall be submitted by the guardian at the time of opening of the account in post office or bank along with other documents relating to identity and residence proof of the depositor.

No Fixed Interest Rate- Under this scheme Interest rate is not fixed and Government will declare on yearly basis the Interest on accounts opened under these rules. For the Financial Year 2014-15 Govt. has declared Interest Rate of 9.10% vide Notification F.NO. 2/3/2014.NS-II, DATED 20-1-2015.

Interest Compounding Monthly/ Yearly

Interest will be compounded yearly and will be credited to account till the account completes fourteen years from the date of opening.

In case of account holder opting for monthly interest, the same shall be calculated on the balance in the account on completed thousands, in the balance which shall be paid to the account holder and the remaining amount in fraction of thousand will continue to earn interest at the prevailing rate.

Where one can open account?-   At any post office in India doing savings bank work and Branch of a commercial bank authorised by the Central Government to open an account under ‘Sukanya Samriddhi Account Rules, 2014’.

Maximum and Minimum Deposit- The account may be opened with an initial deposit of one thousand rupees and thereafter any amount in multiple of one hundred rupees may be deposited subject to the condition that a minimum of one thousand rupees shall be deposited in a financial year but the total money deposited in an account on a single occasion or on multiple occasions shall not exceed one lakh fifty thousand rupees in a financial year.

Term Period – Deposits can be made till completion of fourteen years from the date of opening of the account. The maturity of the account is 21 years from the date of opening of account or if the girl gets married before completion of such 21 years.

Regularisation of irregular account – Where minimum amount of Rs. 1000/- a year has not been deposited than such irregular account may be regularised on payment of a penalty of fifty rupees per year along with the minimum subscription of Rs. 1000/- for the year (s) of default any time till the account completes fourteen years.

Mode of Deposit – Deposit can be made in cash; or   by cheque or demand draft. Where deposit is made by cheque or demand draft, the date of encashment of the cheque or demand draft shall be the date of credit to the account.

Who can Operation the account?

(1) The account shall be opened and operated by the natural or legal guardian of a girl child till the girl child in whose name the account has been opened attains the age of ten years.

(2) On attaining age of ten years, the account holder that is the girl child may herself operate the account. however, deposit in the account may be made by the guardian or any other person or authority.

Premature closure of account –

(1) In the event of death of the account holder. the account shall be closed immediately on production of death certificate issued by the competent authority and the balance at the credit of the account shall be paid along with interest till the month preceding the month of premature closure of the account , to the guardian of the account holder.

(2)   Where the Central Government is satisfied that operation or continuation of the account is causing undue hardship to the account holder, it may, by order for reasons to be recorded in writing, allow pre-mature closure of the account  only in cases of extreme compassionate grounds such as medical support in life‑ threatening diseases, death, etc.

Pass book

(1) On opening an account, the depositor shall be given a pass book bearing the date of birth of the girl child, date of opening of account, account number, name and address of the account holder and the amount deposited.

(2) The pass book shall be presented to the post office or bank. as the case may be, at the time of depositing money in the account and receiving payment of interest and also at the time of final closure of the account on maturity.

Transfer of account to other place –    The account may be transferred anywhere in India if the girl child in whose name the account stands shifts to a place other than the city or locality where the account stands.

Pre-Mature Withdrawal- To meet the financial requirements of the account holder for the purpose of higher education and marriage withdrawal up to fifty per cent of the balance at the credit, at the end of preceding financial year shall be allowed but such withdrawal shall be allowed only when the account holder girl child attains the age of eighteen years.

Closure on maturity or before maturity due to Marriage of Account Holder- The account shall mature on completion of twenty-one years from the date of opening of the account but in case marriage of the account holder takes place before completion of such period of twenty-one years the operation of the account shall not be permitted beyond the date of her marriage. In such closure of accounts account holder have to give an affidavit to the effect that she is not less than eighteen years of age as on the date of closing of account.

Payment of Interest and Principal on Maturity- On maturity or pre maturity withdrawal due to marriage of girl child, the balance including interest outstanding in the account will be paid to the account holder on production of withdrawal slip along with the pass book.

Tax Benefit – The amount deposited towards Sukanya Samriddhi Account is deductible under section 80C of Income tax Act,1961 upto Rs.1.5 lakhs as notified by Notification No.  (click to see Notification :-)09/2015 dated 21.01.2015. Amount deposited in this account will be counted in overall limit of Rs. 1.50 Lakh under section 80C. Interest earned in this scheme is taxable, but maturity amount is exempt.

Comparison with PPF in respect of Tax Benefit- under PPF Scheme interest earned is tax free but interest earned on Sukanya Samriddhi Account deposit is taxable. Investment in Both PPF & Sukanya Samriddhi Account is eligible for deduction under section 80C of the Income Tax Act, 1961.

Drawback of the Sukanya Samriddhi Account Scheme-

1. High Lock in Period
2. Limitation on No. of Account
3. Tax on Interest Income
4. Scheme do not provide for online transfer of Amount in this account. It allows only payment by Cash, Cheque and Demand Draft.
5. No Clarity on Future Interest Rate for this account.
6. No Clarity on Taxability of Maturity Amount.
7. 
   

-