Is Sukanya Samriddhi Yojana Tax Free? Tax Benefits Explained

Is sukanya samriddhi yojana tax free? The EEE answer

Tax people describe this scheme as EEE, short for exempt, exempt, exempt. The three stages are:

So the full maturity amount reaches your daughter without income tax being cut from it. The only conditional part is the first stage, the deduction for deposits, which depends on which tax regime the depositor chooses.

Does it come under 80C? Now it is Section 123

For years, the answer to "does sukanya samriddhi yojana come under 80C" was simply yes. Deposits qualified for deduction under the 1961 Act's Section 80C. A common search is whether sukanya samriddhi yojana comes under 80C and for the old Act the answer is yes.

The law has since changed. From 1 April 2026, the Income-tax Act, 2025 replaces the 1961 Act. What used to be Section 80C is now Section 123, and the eligible investments are listed in Schedule XV of the new Act. Sukanya Samriddhi deposits are included in that list, and the limit stays at Rs 1.5 lakh per tax year.

In practice, many forms, employers and websites will keep saying "80C" for some time. When you see either term in connection with this scheme, they refer to the same deduction. In short, the sukanya samriddhi yojana deduction in income tax under the new law is the Section 123 deduction.

Old regime versus new regime

Individuals choose between two regimes when filing: the old one and the new (default) one. For this scheme the difference is sharp:

• Old regime: deposits qualify for the deduction, up to the shared Rs 1.5 lakh limit.
• New regime: deposits give no deduction whatsoever.
• Both regimes: interest and the maturity amount stay tax-exempt.

So a family on the new regime still gets tax-free growth, just not the deduction. Which regime suits you depends on your whole income and other deductions, so take advice on that choice. Do not open an account only because a caller or agent promises a "tax rebate"; the deduction rules above apply whoever sells it to you. Strictly speaking, what people call a tax rebate on sukanya samriddhi yojana is a deduction from taxable income.

How the Rs 1.5 lakh deduction limit works

The Rs 1.5 lakh figure is a single combined ceiling for all eligible items, not a separate allowance for this scheme. If other qualifying payments already use part of it, only the remaining room is available for your Sukanya deposits.

The scheme's own deposit cap is also Rs 1,50,000 per financial year per account. Note the difference between the two limits:

• The scheme limit is per account, so two daughters' accounts can each receive up to Rs 1,50,000.
• The tax deduction limit is for you as a taxpayer, across everything you claim, so depositing in two accounts does not double the deduction.

Deposit amounts and timing rules are on our deposit rules page.

Sukanya samriddhi yojana income tax exemption on interest and maturity

Interest is credited to the account at the close of every financial year. That yearly credit is exempt, so you do not add it to your income when you file returns. The final payout, whether on maturity at 21 years from opening or on an allowed early closure, is also exempt.

Here is what that means using a figure from our calculator. If Rs 1,50,000 is deposited every year for 15 years and the rate stayed at 8.2% throughout, paying each year's amount by 5 April, the account would reach Rs 71,82,119 at maturity. Of that, Rs 22,50,000 is your own money and Rs 49,32,119 is interest. All of it would be tax-free. The rate actually changes every quarter, so treat this as an illustration only.

Sukanya samriddhi yojana tax benefit for parents

The account is in the daughter's name, and a parent or legal guardian operates it until she is 18. When planning the tax side, keep these points in mind:

1. Decide your tax regime first. Only old-regime filers get the deduction.
2. Check how much of the Rs 1.5 lakh limit other items already use.
3. Keep your passbook updated so each deposit is recorded.
4. Ask your employer's payroll team what proof it accepts for investment declarations, and give it on time.
5. If both parents want to deposit, ask a tax professional how the deduction should be claimed.

Remember that the scheme is a long savings account first. The tax benefit is one feature of it, not the whole scheme. Read how the account works on our home page.

When tax rules may change

Tax treatment is decided by Parliament and the Budget, not by the scheme rules, so it can change. Two recent examples show this: the move from Section 80C to Section 123 when the new Act came into force, and the new regime's removal of the deduction for those who choose it.

Before filing, confirm the current position from the Income Tax Department's material or a qualified adviser. For changes to interest rates, which are separate from tax, see our interest rate page. For withdrawal and closure rules, see our withdrawal guide.