Interest 8.6%  w.e.f 01.12.2011 (subject to change as per GOI/RBI directives) to be applied annually.

(1) This Scheme may be called the Public Provident Fund (Amendment) Scheme, 2011

(2) It shall come into force on the 1st day of December 2011

(3) The Public Provident Fund scheme is a statutory scheme of the Central Government framed under the provisions of the Public Provident Fund Act, 1968.

(4) The account can be opened in any branch of the State Bank of India or its Associates (except offices managed by single officer/clerk) or in any Head Post Office or any selection grade sub post office or in any of the nationalised banks.

(5) An individual can open a Public Provident Fund Account in his own name. He can also open an additional account on behalf of a minor of whom he is guardian. He can subscribe any amount in multiples of Rs. 5/- of not less than Rs.500/- and not more than Rs.1,00,000/- in a year in each of his account. A year for the purpose of the Scheme means a financial year (1st April to 31st March). The deposits in excess of Rs. 1,00,000 made  during a year will not carry any interest and will not be eligible for rebate.

(6) Those having General Provident Fund or Employees’ Provident Fund Account can also open a Public Provident Fund Account.

(7) An individual can open only one account in his/her name either in Post office or in Bank. If two accounts are opened by the subscriber in his/her name by mistake, the second account will be treated as irregular and will not carry interest.

(8) The subscriptions can be deposited in lumpsum or in convenient installment of not more than 12 installments.

(9) It is not necessary to deposit subscription in every month of the year. The amount of subscription can also be varied to suit the convenience of the subscriber.

(10) The account can be transferred at the request of the subscriber from one office of SBI or its Associates to Head Post Office or vice versa.

(11) The account can be closed after completion of 15 full financial years or the expiry of 15 years from the close of the financial year in which the initial subscription was made. This is, of course, optional and the subscriber can continue the account even after the period of 15 years for any number of further blocks of 5 years by exercising an option in form ‘H’.

(12) A subscriber can take a loan from the fund in case of need. The first loan can be taken in the third year of opening the account i.e., if the account is opened during the year 1997-98, the first loan can be taken during the year 1999-2000. The amount of loan will be restricted to 25% of the balance including interest for the year 1997-98 in the account as on 31.3.1998.

(13) A subscriber can make one withdrawal during any one year. The first withdrawal can be made at any time after the expiry of 5 full financial years from the end of the year in which the initial subscription was made (i.e. from the 7th year onwards). The amount of withdrawal will be limited to 50% of the balance at credit at the end of the 4th year immediately preceding the year in which the amount is withdrawn or at the end of the preceding year whichever is lower. For example, if the account is opened in 1993-94 and first withdrawal is made during 1999-2000 the amount of withdrawal will be limited to 50% of the balance as on 31.03.1996 or 31.03.1999 whichever is lower, less the amount of loan if any drawn and which remains to be re-paid. The amount of withdrawal is not repayable. The balance as on 31.03.1996 or 31.03.1999 will include interest upto year 1995-1996 or 1998-1999 as case may be.

(14) A subscriber may nominate one or more persons to receive the amount standing to his credit in the event of his death. No nomination can, however, be made in respect of an account opened on behalf of the minor. In the event of death of the subscriber, the amount standing to his credit can be repaid to his nominee or legal heir, as the case may be, even before the expiry of 15 years.

(15) Subscriptions to Public Provident Fund qualify for deduction from the taxable income of the subscriber for Income Tax purpose like contributions to Provident Fund, Life Insurance, etc.

(16) The interest credited to the fund is totally exempt from Income Tax.

(17) The amount standing to the credit of the subscriber in the fund is totally exempt from Wealth Tax.

(18) The Account Office (including office of SBI and its Associates) can condone default in payment of subscriptions in the PPF account by charging the prescribed fee along with arrears of subscriptions.

(19) The PPF account is not transferable from one person to another. In the case of death of the subscriber the nominee cannot continue the account of deceased subscriber.

(20) The PPF account cannot be opened in the joint names. Further such account cannot be opened in the name of artificial / judicial persons.

(21) The balance in the PPF account is not subject to attachment under an order or decree of court in respect of any debt or other liability (other than Income Tax / Estate   duty liability of the subscriber).

(22) If the subscriber dies and there is no nomination at the time of death, the balance in the account, if it is upto one lakh, will be paid by the Accounts Office to the legal heirs of the deceased on receipt of application in Form G supported with necessary documents without the production of succession certificate. If the balance is more than one lakh, the production of Succession certificate will be necessary.

(23) The account in which subscriptions are discontinued for any reason, will be treated as discontinued account and cannot be closed before maturity. The account will be closed only after maturity and it will continue to earn interest till it is closed after maturity. The facility of loan or withdrawal will not be allowed from such an account.   The account can be regularized by remitting a penalty of Rs.50/- per Financial Year and Rs.500/- per Financial Year (minimum remittance for a Financial Year).  The penalty amount should be credited to Government of India / Reserve Bank of India.

 (24) When the account is sought to be withdrawn from the minor’s account, the guardian should give the following certificate on application for withdrawal.

” Certified that the amount sought to be withdrawn is required for the use of ………………………… Who is alive and is still a minor.”

(25) If the account is opened in the name of the minor and the minor attains majority before the maturity of the account, the ex-minor will himself continue the account thereafter. He will submit a revised application form for opening the account to the Accounts Office. His signature on the application form will be attested by the guardian who opened the account of the minor or by a respectable person known to the Branch.

(26) The ceiling on deposits as provided for by Central Government from time to time, which is Rs.1,00,000/- in a financial year at present, is per Individual.

(27) Income Tax Deduction U/s. 80C is available on investment in PPF .

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0 responses to “Revised Public Provident Fund (PPF) Scheme w.e.f 01.12.2011”

  1. NILESH J. PATEL says:

    my children are having PPF account. now they became NRI. AND FROM THIS MARCH END 16. THEIR PPF ACCOUNT COMPLET 15 YEARS. I.E PPF ACCOUNT MATUER ON 1ST APROL 2016.

  2. Shailesh K Chiniwala says:

    Dear Sir,
    ICICI bank has started with PPF account. I want to transfer my ppf account from state bank of india to ICICI bank. Let me know if this is possible and How?

  3. jyoti says:

    Can a guardian withdraw money from pod if minor has turned major?

  4. Prashant says:

    PPF a/c of a deceased person will earn in interest till the date of death or date of settlement of that deceased a/c.?

  5. Jahnavi says:

    Interest is tax exempt. But is the principal tax exempt as well? Say I have deposited a lakh each year for 15 years, when I get my 15 lakhs back, will there be tax on this amount? Will I pay ANY tax whatsoever?

  6. Ashwin says:

    If full amount of PPF Contribution of Rs.100,000/- has been deposited before 5th April 2012, can I claim full tax benefit unde section 80C even though I would not have an income of Rs.100,000/- before 5th April 2012?
    Does the PPF contribution have to be neccesarily be from the income for the same financial year for which the tax benefit is sought?

  7. Ashwin says:

    For the benefit of Jayanti Dedhia: If you ahve not got interest for the particular month for which your account had been debitted on 4th of the month, please take up the matter with the branch. Please do this in writing, and keep a copy of the same. The branch is bound to give you the difference of interest. For my accounts, this has happened several times, and each time I have got the difference of interest credited in the PPF account by the branch. You may also note that if there is delay in granting you the difference, you can also insist on getting the interest on that difference amount right from 1st of April of the subsiquent year. I have also got this done for my friend’s account, even after a period of more than a year had elapsed.


    good article.. some queries on PPF interest calculation.. my a/c is debited on 4th for PPF contribution , still I was not given the interest for that month .. any guide line for interest calculation ??

  9. S.Kumar says:

    My present balance in my PPF A/c is approx. Rs.98000/- after 17 years(extended period), how much amount, I can withdraw as on date. Please let me know at the earliest to take decision.

  10. Vishal says:

    If I have opened the account initially by (say) 12000/- then is it necessary to deposit a minimum of that amount every year or the amount to be deposited may be decreased? 

  11. CA.Subhash Chandra Podder says:

    Good information.
    CA. Subhash Chandra Podder

  12. Vijay Pandurang Joshi says:

    Can one deposit Rs.1 lac each in a year in the self account as well as in the minor child’s account ? pl clarify. If yes, it is obvious presumption that both deposits will earn interest. wishing U all Happy Independence Day.

  13. mudit agrawal says:

    Please let me know that whether 8.6% shall be applicable for deposits made after 1.12.11 or for earlier deposits also.

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