New Changes in Public provident fund (PPF) account:
The Govt. of India has notified the revised Public Provident Fund Scheme 2019 on 12th December 2019, wherein a few changes have been made primarily related to the account operations. Here are five changes in PPF account rules that you must know:
√ Removal of restrictions in number of deposits in a year.
√ Additional reasons allowed for premature closure of account.
√ Continuation of PPF Account after 15 years without making deposit.
√ Change in the Interest Rate on Loan from PPF Account.
√ Changes in Forms for PPF Account
Opening of PPF Account:
PPF account can be opened with either a Post Office or with any nationalised bank like the State Bank of India or Punjab National Bank, etc. These days, even certain private banks like ICICI, HDFC and Axis Bank among others are authorized to provide this facility.
Interest Rate of PPF:
The current interest rate is 7.1% p.a. (for the quarter 1 April 2021 to 30 June 2021; continued from the previous quarter) that is compounded annually. The Finance Ministry set the interest rate every year, which is paid on 31st March. The interest is calculated on the lowest balance between the close of the fifth day and the last day of every month.
Eligibility to Invest in PPF:
Any Indian citizen (Individual) can invest in PPF. One citizen can have only one PPF account unless the second account is in the name of a minor.
NRIs and HUFs are not eligible to open a PPF account.
Characteristics of PPF:
√ Tenure: The PPF has a minimum tenure of 15 years, which can be extended in blocks of 5 years as per your wish.
√ Investment Limits: PPF allows a minimum investment of Rs 500 and a maximum of Rs 1.5 lakh for each financial year.
√ Risk Involved: Since PPF is backed by the Indian government, it offers guaranteed, risk-free returns as well as complete capital protection. The element of risk involved in holding a PPF account is minimal.
√ Balance: The account can be opened with just Rs 500. Annual investments above Rs 1.5 lakh will not earn interest and will not be eligible for tax saving.
√ Loan Against PPF: loan amount can be a maximum of 25% of the 2nd year immediately preceding the loan application year. You can taken the loan against PPF account between 3rd and 5th Year.
PPF withdrawals:
As a rule, can fully withdraw the PPF account balance only upon maturity i.e. after the completion of 15 Years. Upon completion of 15 years, the entire amount standing to the credit of an account holder in the PPF account along with the accrued interest can be withdrawn freely and the account can be closed. However, if account holders are in need of funds, and wish to withdraw before 15 years, the scheme permits partial withdrawals from year 7.
Tax benefits of investing in PPF:
PF is one investment vehicle that falls under the Exempt-Exempt-Exempt (EEE) category. This, in other words, means that all deposits made in the PPF are deductible under Section 80C of the Income Tax Act. Furthermore, the accumulated amount and interest is also exempt from tax at the time of withdrawal.
Closing of PPF account:
Upon completion of the 15-year term, you can access the entire account balance, withdraw it fully, and close the account. Any time before completing the full tenure of the account, you cannot withdraw the entire account balance in any circumstances. However, premature withdrawal of up to 50% of the account balance is allowed after completing 5 years. This is permitted under special circumstances only.
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Regards to the recent change that NRIs can clolse the accout after 5 years is not explained properly. Some banks say the investor will not get any interest from the date he becomes NRI. Can this be cllarified.
I as guardian (father) of my daughter opened a PPF account in 2004 and became NRI in April 2007. On completion of 15 years (expired on 30th March 2020) I requested the Post office to close the account and issue a cheque of the accumulated balance including the interest amount thereon. Am I right in my observation?
I had a ppf ac from 1983 onwards till date with sbi. I was continuing I wanted to transfer it to Bob. I gave a letter for tranfer to sbi . And they gave a DD a letter for transfer . And just a statement for 1 yr i.e 21/22 .But BOB is not accept ing it . They
Want statement from 1983 onwards .I am
A loser of 1,65,017. in this problem. I just
Want to know whether I can complaint this matter to RBI or which ever authority .
Please suggest .Thanks
lodge complaint in CPGRAM GOI
If i have invest in ppf every year Rs.1,50,000/- for 80c benefit is each year invested amount having lock in of 7 years or not
Can I open ppf account on behalf of my son.i also have PPF account.and how much money I can deposit in my son PPF account.if I deposit 1.5 lakh in my PPF account in a year
If PPF Maturity date falls in 1st quarter of the year then he has to wait till 01st April to get Maturity amount or he can get exactly on maturity date ?
Secondly if account holder became NRI after the opening date of account, then also he has to wait for 15 years ?
NRI are not allowed to open a ppf account but if he is already a ppf account holder was continuing before becoming NRI then he is allowed to maintain his existing ppf account till maturity period inspite of becoming NRI
Nomination rules ?
What is the rule for payment of PPF deposit in case of death of account holder without nomination.
In case, one does not extend PPF after maturity, what rate of interest will the a/c continue to get ? Savings rate or PPF rate?
The eligibility to open an account is not based on citizenship but on residential status under FEMA.