Are you eligible to continue Sukanya Samriddhi Yojana after becoming NRI? As there is no clarity on this front, many NRIs are confused.
SSY or Sukanya Samriddhi Yojana is one of the best debt instruments launched by the government for a girl child. I have written various posts on this. You can refer them all –
Now in this post, I will not dwell much on the rules, regulations, and features of SSY. Instead, I will concentrate on the main topic of this post which is – Are you eligible to continue Sukanya Samriddhi Yojana after becoming NRI?
Many investors are already aware that an SSY account is not eligible for NRIs. However, the confusion is whether one should close the SSY account once the status of the girl child changes to NRI or not.
Are you eligible to continue Sukanya Samriddhi Yojana after becoming NRI?
Let us look into the 2016 notification and 2019 (the latest one) notification of SSY rules. The gazette notification dated 18th March 2016 has these lines. Note that in SSY, beneficiary and account holder means a girl child.
“Beneficiary” means an eligible girl child who is a resident Indian citizen at the time of opening of the account and remains so till the maturity or closure of the Account;
If, after the opening of an Account, the Account holder becomes a non-citizen or non-resident of India, intimation to this effect shall be given by the guardian or the Account holder to the post office or the Bank concerned, as the case may be, within a period of one month from the date of such status of the Account holder’s citizenship or resident status.
It is clear from this 2016 notification that once the girl child’s status changes from resident to non-resident, then you are not allowed to continue the SSY account.
However, the confusion started after the publication of the 2019 gazette notification on SSY (Notified vide G.S.R. 914(E) dated 12/12/2019 and further amended vide G.S.R. 288(E) dated 05/05/2020) In this notification, the government was silent about what should investors do who opened the SSY and later turned into NRI.
However, in one such RTI reply, the National Savings Institute referred to the below lines to interpret the rules.
Referring to point 4, it is mentioned that even if the account holder turns into NRI, the SSY account will continue to earn interest as usual up to maturity. However, point 5, which I wrongly interpreted earlier that it’s applicable to NRIs is wrong. It refers to the citizens of India. However, as per Indian law, a “Non-Resident Indian” (NRI) is considered a citizen of India, meaning that even though they reside outside the country, they still hold Indian citizenship according to the Citizenship Act, 1955; essentially, an NRI is an Indian citizen living abroad.
I have one more proof to cross-check. It is the Post Office’s internal circular, where they mentioned as below.
“In this connection, it is clarified that if the account holder or guardian or both becomes NRI subsequently after opening the account under National (Small) Savings Schemes including Sukanya Samriddhi Account in accordance with the provisions in Rules 4 (3) of Government Savings Promotion General Rules 2018 and accordingly, SSA account shall be operated till its maturity under the provisions of SSA Scheme 2019 if the account holder/guardian turns NRI.“
Here, they are referring to two notifications. One is from 2018 and another is from 2019 (which I have referred to above). If you cautiously check the “Rules 4 (3) of Government Savings Promotion General Rules 2018”, then it’s actually the same which is available in the RTI reply (Image shared above).
“If a depositor in a single account, or any of the depositors in a joint account, or either the guardian of a minor or person of unsound mind or minor depositor, as the case may be, subsequently becomes Non-resident Indian during the period the account is in operation, the account may be continued till its maturity and the benefits available to the depositor in the said account shall be available only on non-repatriation basis and the account shall not be allowed to be extended or continued beyond maturity, even if such extension or continuation is and otherwise permissible, and no interest shall be payable after the date of its maturity.“
By referring to all these notifications from 2014, 2019 (subsequent 2020 notification), the RTI reply of the National Savings Institute, and the Post Office internal circular, we can clearly conclude that if during the account opening the status of the girl child is resident and later her status changes into non-resident, then SSY account can be continued till maturity and such accounts are eligible to earn the applicable interest rates.
