CA Sandeep Kanoi
To increase household savings for the common man, the Budget 2014 presented by Finance Minister Arun Jaitley on 10th July 2014 hiked the PPF (Public Provident Fund) to 1.5 lakh per annum from existing Rs. 1 Lakh Per Annum. Investment in PPF qualifies for deduction under section 80C and Similarly investment limit under 80c has also been hiked by Rs 50,000 to Rs 1.5 lakh. Increase in PPF Limit been notified wef 20.08.2013 – Finmin Notifies revised PPF Investment limit of Rs. 1,50,000/–
The public provident fund is established by the central government. One can voluntarily open an account with any nationalized bank,selected authorized private bank or post office. The account can be opened in the name of individuals including minor.
The minimum amount is Rs.500 which can be deposited. The rate of interest at present is 8.7% per annum, which is also tax-free. The entire balance can be withdrawn on maturity. Interest received is tax free. The maximum amount which can be deposited every year now is Rs. 1,50,000 in an account. The interest earned on the PPF subscription is compounded. All the balance that accumulates over time is exempt from wealth tax. Moreover, it has low risk – risk attached is Government risk. PPF is available at post offices and banks.
Tax Benefit from Investment in PPF
Interest earned is fully exempted from tax without any limit. Annual contributions qualify for tax rebate under Section 80C of income tax. Contributions to PPF accounts of the spouse and children are also eligible for tax deduction. Balance in PPF account is not subject to attachment under any order or decree of court. But, Income Tax authorities can attach the account for recovering tax dues. The highest amount that can be deposited is 1,50,000 (please note that the limit has been increased from 1,00,000 to 1,50,000 in 2014-15 budget and the circular has been issued on 20th August 2014) Tax bracket for PPF is EEE (i.e. Exempt,Exempt,Exempt). So contribution is exempted under 80C, Interest earned is tax exempted and withdrawal is also tax exempted
One can withdraw the investment made in 1st year only in 7th year. However, loan against investment is available from 3rd financial year.
Hi friends
I tried to deposit additional 50k to my PPF account (SBI) via net banking but it is not accepting ….
can some body please update from which date we can deposit additional 50k to ppf accounts. .
Mr Mahesh, Yes you can open ppf account beyond 60.
Mr mahesh. Yes you can open ppf account even now.
Even if bank accepts, better to deposit after 2nd and by 4th so that you will get interest in your sb account and will not loose any interest in ppf account. PPF accounts will compute the interest based on the minimum amount between 5th and last date of the month.
SBI still not accepting more than 1 L in PPF. When the same will be available?
Now the President of India has given his ascent to the Finance Bill on 6th. now there will be gezette notification by the Govt Of India and based on that Finance Ministry will issue Circular/Office Memorandum based on which the Banks will issue Orders to it’s branches. On it’s receipt by the branch, the depositer can deposit upto 1.50 lakh!
It seems government of India is very sensitive on the issue but system is applying break on its speed. Every body is waiting a notification to this effect immediately.
Best thing to do is to deposit around 3rd or 4th in online transfer or on 1st if it is by cheque. By this way one can get interest upto that day in SB a/c and thereafter in PPF account.
But the ideal is to put whatever one is contemplating to put in a year at the beginning, subjec to availability of funds as keeping in FD is getting interest only to pay tax on it at a later date.
The general tendamcy to deposit for all tax saving instruments in the month of Feb of the financial year is not rewarding.
Now one can deposit 50k next month as interest will be added for money deposited before 5th of the month
President has signed the Notification on 6/8/2013 as per TaxGuru today.
1.5 L PPF will be accepted only after approval of the bill by the President of india.The bill has been passed by both houses.
Thats sloppy. Atleast they should have accepted the deposits.
The administration in the system is not very sensitive to the needs. it is said they are thick skinned. The promise that chane will come with the change of guard is still not seen. Millions of middle class section of the socitey are waiting for this Notification to come about. As rightly said the interest is gone!
It simply means we all have lost a months interest on 50000 more! 🙂 5th Aug 2014
Dandapat, My on line transfer failed yesterday. Banks are still not accepting additional sum.
One has to wait for the President’s assent. Until the ‘online’ activities came they used to accept and not allow any interest if the deposited amount is above the permissible amount for the grant of exemption/otherwise. Your statement imply the ‘conditionality’ is incorporatd by SBI on it’s online transfer to PPF. One has to wait for the official notification and correction/changes in the software.
So failed to undersatnd, who is now accepting deposit of a max limit 1.5 L in PPF account as Mr Sundaram have posted today at about 10.06 AM.
Today while in contact with State Bank of India at about 11.30 AM, the maximum limit of deposit in PPF A/C yet to increase beyond 1.0 L as on date and time. No circular , SBI have received till now.
Hi Guru, did you try on line (neft/rtgs) transfer last week ? Because I am going to try in this week
Does anybody know if SBI started accepting 50K additional deposit in PPF as on date, because when i did net transfer last week, it got returned back saying exceeded the limit?.
If you deposit into account, it will get credit.
Have bank started accepting additional 50k in ppf account as of 2nd august ?
It will be effective from 1/4/2015 A.Y. i.e. 1/4/2014 – 31/3/2015 Financial Year. Not to confuse the readers (Mr.Pramod)
what about the results of ca final may 2014
Govt of India Taxes changes are implemented immediately just after Budget but any changes in personnel TAxes implemented much after. Why this anamoly.
Today is 1st August….Still SBI Bank not accepting payment over Rs 1 lakh for PPF…..
PPF contribution of 1.5 lacs p.a. is effective 1st April 2015 onwards i.e. FY 2015-16………….
I same the problem the me also. why government is delaying to issue circular?
Finance Bill is passed in both the houses of Parliament and gone to President for his assent. After this only Notification will be issued in this regard.
sbbj not accepted increase limit in ppf till 25.02.2014
Banks are yet to accept the deposit of Rs 1.5 L on account of PPF for FY 2014 – 15. The date of publishing such Notification from ministry is awaited. How to get confirmation of the same.
Amit and others. I think only after the FINANCE BILL is passed in the parliament the Ministry will issue about expansion of PPF to the various PPF receiving institutions including the banks.
I deposited today but my payment got returned back to my account.
I also spoke with bank manager and they says that still increment is not implemented.
still limit is old one only. new limit is not set yet.
On 11/7/2014 I posted this to the Customer Care thru online SBI
Can I deposit/transfer NOW more 50000 in PPF to make this yearly contribution to 150000 or wait for few days more?
This was their reply:
We thank you for banking with us. We will update the PPF limit in Internet Banking portal as soon as we will get notification from Govt of India. For more detail, please contact your branch. We regret for the inconvenience caused.
Yes
I tried to deposit more than Rs 1,00,000/- in my PPF account but SBI denied that the notification yet not received by them. Can any one hi-light on this? Or copy of notification for PPF limit hike up to Rs 1,50,000/-
Till 4 days ago SBI was not accepting deposits above Rs. 1 lac per annum through its IB. Maybe, we will have to wait till the finance bill is passed by the parliament.
When will the Notification reach Banks of enhancement of PPF limit to 1.5 Lacs and banks start accepting 1.5 Lac contribution
i have already deposited 1 lakh in ppf acount can i further deposit 50000 for tex saving
1Lac I have already deposited on 2nd April 2014 , Can I deposit this additional 50000 today or should I have to wait for budget to be passed and some notification to come
hi,
I Have a query.Since PPF contribution increased to 1.5lacs per annum, from FY 2014-15, 80C deduction increases from 1lac to 1.5lac’s.
My Doubt is,
Even if we have less amount(below 1.5 lac’s) of contribution in PPF, and say having higher amount of deduction of housing loan principal, Shall i claim 80C as 1.5 lacs???
Pls clarify.
Please make it clear that the investment made by you is being done on or after 1st April’2014 (i.e for financial year 2014-15)
If it is so then you can further invest Rs 50,000/- in PPF as the deduction amount is now enhanced to Rs 1,50,000/- which will be applicable from the F.Y. 2014-15.
I have already deposited 1 Lakh in ppf till now. Can I now deposit 50,000/- more for the financial year 2014-15.
Therefore as i conclude, you can open your PPF account at the age of 60…..
Looking forward to hearing from you.
ndividuals who are residents of India are eligible to open their account under the Public Provident Fund scheme. A PPF account may be opened under the name of a minor by his/her legal guardian. However, each person is eligible for only one account under his/her name.
Non-resident Indians (NRIs) are not eligible to open an account under the Public Provident Fund Scheme. However a resident who becomes an NRI during the 5 years’ tenure prescribed under Public Provident Fund Scheme, may continue to subscribe to the fund until its maturity on a non-repatriation basis. Deposit to PPF is tax deductible for individual assessees in India u/s 80C of Income Tax Act, 1961.
Hope i have cleared your doubt.
@ Mahesh masuria.
Increasing PPF limit is a good move. More expectation from FM for BPO Industry where maximum no. of youth are working. Also both employee and employer contribution are part of employee CTC. So there is no major relief from inflation as companies are reducing cost day by day.
what types of deduction is available for Section 80 C
May i get reply from you that i am 60. I til no ppf a/c.can i open it or not?
Thank you
Yours faithfully
Mahesh maisuria
The increase in the PPF contribution eligible for rebate should have been, i.e. Rs.50,000, exclusively and not a part of rise from 1 lakh to 1.5 lakh. It is good on paper and for publicity.
is this 1.5 lakhs in PPF allowed for 80C????????