- Jul
- 18
- 2012
How to extend PPF account beyond 15 years
We have to initially open the Open the PPF account for 15 years and after the initial period of 15 years is over, one can keep on extending the deposit for a period of 5 years at a time. In fact, this is where the magic of PPF begins. One need not start a fresh PPF account and continue it for all of 15 years — just extend the old one for five years at a time, indefinitely. This way, the same PPF account offers additional liquidity to what is offered during the initial term.
Overall, then, after the initial 15-year period, you can convert your PPF investment into a 5-year deposit that offers tax-free interest, tax saving under Sec. 80C and immense liquidity —- and all this for your lifetime. Now, let’s briefly examine the rules of extension.
The PPF account can be continued (after the term of 15 years) either with or without further subscription. The rules for contribution to the extended account remain the same as during the 15-year period. Once the choice is made for a block of five years, it cannot be changed.The only thing that investors should be careful of is that once an account is continued without contribution for any year, the subscriber cannot change over to with-contributions extension. [Notification F.3(6)-PD/86 dt 20.8.86].
The choice to extend the PPF account with subscription has to be made within one year from the maturity of the account. If this is not done, then by default the account is deemed to have been extended without further contribution for a period of five years.
Coming to liquidity, an investor, continuing his account with fresh subscriptions, can withdraw up to 60% of the balance to his credit at the commencement of each extended period in one or more instalment, but only one per year.
(Notification F.7/2/97-NS IIdt. 9.2.1998). For example, say the term of your PPF account is ending on March 31, 2007. The balance at that time in the account is say Rs 15 lakh. Now, you may opt to continue the account for 5 more years (i.e. till March 31, 2012) and invest regularly as you have been.
However, over the period of five years till March 2012, you may withdraw only Rs 9 lakh which is 60% of the balance standing to your credit on March 31, 2007.
But, what if you wish to continue but not invest further? In other words, you may wish to earn the tax-free interest but may not wish to commit further funds. That, too, is possible.
In case the account is extended without contribution, any amount can be withdrawn without restrictions. However, only one withdrawal is allowed per year. The balance will continue to earn interest till it is completely withdrawn
(Clarification 7 to Clause 9(3A) of the PPF Scheme, 1968).
Form: The investor has to submit Form H at the post office or bank where the account is held if he intends to continue with the subscription. The form is available at http://www.indiapost.gov.in/pdfForms/PPFContinuation.pdf.
Sandeep Kanoi+
Can I claim rebate under sec 80c the contrubution to my PPF account Rs.50000/-,to my spouse PPF a/c Rs.25000/- and to my son PPF account Rs.25000/- taking altogether
and claim rebate under sec 80c of Rs.100000/-? All contributions made out of my
taxable income.
mr k b singh,
the request for extension may be made in 2013 as per my experience with sbi.
OP anand
Hi,
I have opened PPF account on 11th October 1998, what will be the date of its closure?
Regards,
Ravindra Khisti
Sir, I opened PPF A/c in 23 Feb. 1998. When it should be applied for extention for next fibe block years
Thanks,
K.B. SINGH
Dear administrator, Cant you get this question from Naresh Bhadryadra d/d 19 oct 2012 9:19 AM,answered even after one month? This forum loses its value if such questions from uninitiated simple folks go unanswered. Pl realise that we,the non-experts,depend on YOU,for the answers,as we dont know where else to go.Pl get such questions answered quickly and take credit for it.
I have a PPF account with SBI from Feb 91. It was due to mature in Mar 06, when I got it extended for 5 years till Mar 11. In Mar 11 I forgot to get it extended. Two days back when my cheque for PPF subscription was returned by the bank, I came to know about it. How can I get it extended now ? Last year my subscription was accepted by bank in Mar 12 and was also given the intrest till Mar 12. What about the intrest from Apr to Oct 12?
One thing I forgot to mention above. The writer may add that the lead article is applicable only to resident individuals.(kindly check if I am right in saying this,before adding this point).If my understanding is correct,HUFs have different rules in this regard.
Thanks for clarifying this issue in very simple,unambiguious and understandable language.It has done in one stroke what had not been done in earlier articles, in spite of several queries raised on this issue over years. It is this kind of articles that need to be promoted in TAXGURU—-keeping the common man’s need in view. That is what brings credit to TAXGURU.
Is the credits to PPF a/c after 15 years eligible for income tax exemption ?
Sir,
I opened PPF a/c in 1990 in New Delhi GPO (popularly known as Gol Dakkhana). After March 2005, I could not deposit any amount in a/c nor I have given any mandate.
Now I want to continue my PPF a/c but Post office is not allowing. I have discussed with them the penalty clause for reviving the a/c but they not budging from their stand and are insisting closure of old account and opening of fresh a/c. Their contention is that PPF a/c can be revived only within expiry of one year from the date of maturity of PPF. I understand that Banks are allowing revival of such a/c after levying penalty.
Please guide whether my a/c can be revived. If so pl quote the relevant guidelines issued by Govt. to be produced before them.
Manjeet Singh