Public Provident Fund (PPF) is considered as most important and safe amongst all tax saving investments schemes. This scheme is falls under the EEE category i.e. Exempt, Exempt and Exempt which means if you invest in it, you will get a deduction u/s 80C on your income. Further, the interest you earn on it alongwith its maturity proceeds will be tax-free in the hand of investor.
While dealing in Public Provident Fund, investors having various doubts therefore in this article I am discussing some Frequently Asked Questions (FAQ) related to PPF. Such as whether more than one account is allowed under PPF or not? Eligibility criteria for PPF account, information related to deposit criteria and interest earning on PPF account balance, loan facility, etc
Page Contents
- Frequently Asked Questions related to Public Provident Fund (PPF) are as under:
- 1. Can I maintain more than Public Provident Fund (PPF) account under my name?
- 2. What is the eligibility for investing under Public Provident Fund (PPF) Scheme, 1968?
- 3. What is the minimum and maximum amount that can be invested under the Public Provident Fund (PPF) Scheme, 1968, in a financial year?
- 4. What happens if I fail to deposit any amount in one or more Financial Years?
- 5. What is the Interest earned in Public Provident Fund (PPF) account?
- 6. When does a Public Provident Fund (PPF) account mature?
- 7. Can I extend the tenure of a Public Provident Fund (PPF) investment beyond the Maturity Period?
- 8. Can I terminate or closed the Public Provident Fund (PPF) account before before maturity?
- 9. Can I withdraw funds from my Public Provident Fund (PPF) Account?
- 10. Can I avail of Loan facility on my Public Provident Fund (PPF) investment?
- 11. What is the process for transferring my existing Public Provident Fund (PPF) account maintained with another bank/post office to Bank of Your Choice?
- 12. Role of another Bank Branch in case of Public Provident Fund (PPF):
1. Can I maintain more than Public Provident Fund (PPF) account under my name?
Only one PPF account can be maintained by an Individual, except an account that is opened on behalf of a minor.
2. What is the eligibility for investing under Public Provident Fund (PPF) Scheme, 1968?
A Public Provident Fund (PPF) account can be opened by resident Indian Individuals and individuals on behalf of minors or a person of unsound mind..
Only one Public Provident Fund (PPF) account can be maintained by an Individual, except an account that is opened on behalf of a minor.
A Public Provident Fund (PPF) account can be opened either by the Mother or Father on behalf of their minor Son or Daughter; however the Mother and Father both cannot open Public Provident Fund (PPF) accounts on behalf of the same minor.
Grand-parents cannot open a Public Provident Fund (PPF) account on behalf of minor grand-child; however, in case of death of both the Father and Mother, Grand-parents can open a Public Provident Fund (PPF) account as guardians of the Grand-child.
3. What is the minimum and maximum amount that can be invested under the Public Provident Fund (PPF) Scheme, 1968, in a financial year?
The minimum deposit amount is Rs. 500 per annum and the upper ceiling limit is Rs. 1,50,000 per annum.
4. What happens if I fail to deposit any amount in one or more Financial Years?
A penalty of Rs. 50 will be levied per year of default, if the customer doesn’t deposit the minimum deposit amount of Rs. 500 on the completion of the financial year.
5. What is the Interest earned in Public Provident Fund (PPF) account?
The current rate of interest on Public Provident Fund (PPF) is 7.9%, which is compounded annually .
6. When does a Public Provident Fund (PPF) account mature?
A Public Provident Fund (PPF) account gets matured after the completion of 15 years from the end of the year in which the account was opened.
7. Can I extend the tenure of a Public Provident Fund (PPF) investment beyond the Maturity Period?
A customer can extend the tenure of a Public Provident Fund (PPF) investment for a block period of 5 years beyond the maturity period by submitting Form 4 within one year from the date of maturity.
8. Can I terminate or closed the Public Provident Fund (PPF) account before before maturity?
No premature withdrawal is allowed for Public Provident Fund (PPF) accounts. Only in the case of the death of a customer, their nominee /legal heir can close the account by submitting the required documents as guided by the Ministry of Finance.
9. Can I withdraw funds from my Public Provident Fund (PPF) Account?
Customer can make one withdrawal every year, from the 7th financial year, of an amount that does not exceed 50% of the balance of the customer credit at the end of the fourth year immediately preceding the year of withdrawal or the amount at the end of the preceding year, whichever is lower.
Facility of partial withdrawal under PPF Scheme shall be available to the account extended, subject to the condition that the total withdrawal during the block period of five years shall not exceed sixty per cent. of the balance at credit at the commencement of the block period.
Please note that the withdrawal, subject to the ceiling as specified above may be made either in a single or in yearly instalments.
10. Can I avail of Loan facility on my Public Provident Fund (PPF) investment?
Customers can avail the loan after completion of 2 year from the date of Initial subscription but before expiry of 5 years. Application must be file in Form 2 to the accounts office and for the amount which is less than or equal to 25% of total amount of credit balance in your account at the end of 2nd year immediately preceding the year in which the loan is applied for.
11. What is the process for transferring my existing Public Provident Fund (PPF) account maintained with another bank/post office to Bank of Your Choice?
As per the PPF scheme of the Government, subscribers can transfer their PPF account from one authorised bank or Post office to another. In such a case, the PPF account will be considered as a continuing account. To enable customers to transfer their existing PPF accounts to Bank of your choice, the following process must be followed.
The customer approaches the bank or the Post office where his current PPF account is held and makes an application for transfer of PPF account to another Bank’s branch.
Once the application is processed, the existing bank/Post office arrange to send the original documents such as a certified copy of the account, the account opening application, nomination form, specimen signature etc. to another Bank branch address provided by the customer, along with a cheque/DD for the outstanding balance in the PPF account.
12. Role of another Bank Branch in case of Public Provident Fund (PPF):
Once transfer in documents are received at another Bank branch, customers are required to submit fresh PPF account opening form and Nomination form, along with their original passbook . Also customer is required to submit a fresh set of KYC documents.
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I opened a ppf account after one year working in foreign country and am depositing since 2 years. What impact will be there? Can i get my money back. I should continue it or not.
Hi,
I have added a surname to my name and then I also made the changes in passport, aadhaar card and PAN card. Thanks to the online facility available for these kind of work. Now I wanted to change the same in PPF account. Could you please kindly tell the procedure for the same.
My cousin brother took a student loan of 4 lacs from a Bank and had also opened a PPF account with the same bank earlier. In a very shocking and unfortunate incident he passed away leaving 3 lacs loan still to be cleared. The Bank closed his PPF account which had 1 lacs rupees and instead of crediting the PPF money to the Nominee (in this case his mother), they retained the PPF amount and have now sent a notice for recovery of 2.5 lacs to the deceased’s mother. Is the Bank in violation of any laws here by touching the PPF amount because as per my understanding of the RBI rules, the PPF amount cannot be touched under any circumstances. Appreciate if someone can clarify. Thanks Manish
I deposited 1L in my SBI PPF account in 2013-2014. My wife also deposited 1L in her SBI PPF account in 2013-2014. I opened PPF account in my 3 year old son account in diff bank (2013-2014) and I am guardian for this account. My Father has deposited 20K (through cheque) in 2013-2014 in my son PPF account. As per rule we should not deposit more than 1 L in my account and my son account. Last year I was not aware about this rule. Please advice what to do. Can I withdraw the amount from my son’s account?
My daughter will turn 18 years ( Major) on 2-10-14 and have been depositing money in her account as a minor . Can i deposit money before 2nd cotober before she turns a major 18 and claim my tax rebate on the same.
Hi,
I have made investment in PPF acount on my wife’s name As Well AsOn My Account. Can i claim this amount for exemption under Section 80 C. Also she is not employed any where and not claiming this for any tax exemption.
Waiting For Your Valuable Reply
There are several queries on PPF, which are not answered. I am giving you hterwith an information, which is going to be the replies to many of the queries raised above.
(1) Husband can put deposit from his own income in wife’s account, and get IT benefit under 80C. Even such deposit can be made by wife in husnand’s PPF account from her own income source.
(2) One can open only one PPF Account, except by father or mother, in the name of their own minor children. Additional PPF account can be opened, as guardian, during minority of the children. In such account, deposit made by Parent, is within overall limit of 1.5 lakh. That5 meaqns, if father want to put aqn amount in his minoe son’s PPF A/c, then amount that he puts, i8s withing 1.5 lakh limit given for his own account. Only in adult’s account, each adult has seperate Rs.1.5 lakh in his/her account.
Parents can deposit their own income in their children’s PPF Account, and get IT rebate, under 80C.
(3) If second PPF account is opened in his/her own name by any person by mistake, then second account has to be closed, without any interest on the deposit made in it. Also, if Tax Rebate has availed on such account, then that has to be surrenderred, and applicable tax rebate availed on such deposit has to be paid in subsequent financial year, with due interest.
If you so prefer, you can make appeal to Ministery of Finance, Govt. of India, and request to merge both PPF Accounts in to one account, which was older one. In such a case, combined deposit made in any financial year in two PPF Accounts, which exceeds allowable deposit (now it is 1.5 lakh, earlier it was 1 lakh, earlier to it, it was 70,000 etc.), then such excess deposit will be returned to PPF Account holder, without any interest.
So far, unfortunately Ministry of Finance has not taken any such action on any PPF A/cs referred to it, this is a reality situation.
(4) If any PPF account has to be closed, for any reason, then you can get the closing forms from any Bank, nearest to you (which is maintaining the PPF Account), and after filling it, you can sent it to your bank by registered AD post with your PPF Pass Book. with requisite postage affexed envelope, to get you the closing cheque and PPF Pass Book by Registered AD Post. It is not necessary to go to your bank yourself personally to get your PPF Account Clossed and get closing cheque.
(5) PPF Account can be used as Tax Free Pension Account, after its first maturity, when it completes first 16 years of its existance. For example, if you have opened your PPF Account on 2.3.2002, that means you have opened it in financial year 2001-2002. Add 15 to it. 2016-2017, On 1.4.2017, you can withdraw 60% of the balance as on 31.3.2017, from this PPF Account. Do withdrawal, at 12% (that is, one fifth) every year. Only one withdrawal per year is allowed. You can continue this PPF Account for further block of five years, that is upto 2021-2022, by filling Form-H. During this five years, you can continue depositing Rs.1.5 lakh from the withdrawal made from this PPF Account every year, and rest of amount can be used as monthly pension by equally dividing the balance by twelve, and enjoy Rs.33,000/- per month tax free pension through out your life, by keeping PPF Corpus constant.
This pension is more convenient than Insurance Company’s Pension Scheme, which is taxable, with 8% interest, and some times, after the death of the pensioner, corpus is not returned to his legatees.
To know how this PPF pension works, kindly Email me on my Email ID: s.s1954@rediffmail.com
Shirish S. Shanbhag, Mumbai-400089. Dated: 30.7.2014.
what is the time limit of deposit the 1,50,000/–in my ppf accont after the budget announce.
hi sir,
please let me know i a financial year how many times we can deposit and withdraw the amount.
I am not a minor. But, can my father get get deduction under this PPF scheme ; if he is the one, who deposits the sum into my PPF account.
My uncle has a ppf a/c with sbi with me(major) and my brother(minor) as nominess, and now my uncle has expired so I want to know that how will I recieve the amount?? and I would also like to inform that the a/c has already matured(more than 15yrs old).
I have opened two PPF account in my name one from SBI & other from POST OFFICE..in the year 2006 till now continue…Sir my question is it legal or illegal ..Can I close one account if yes how can i close it..??????????
Dear Sir,
I am 59 and till date I have not opened PPF a/c. Now, I want to open PPF a/c. with monthly or quarterly or annually crediting the amount. Can I do so at my this age? Please guide through my email address mrmaisuria_25@yahoo.co.in. I expect for reply from your end.
I had opened an account on March 27, 1989 and extended it twice. I was under the impression that it will mature on March 31, 2014 and I can close the same after that date. The Bank has informed that it will mature only on March 31, 2015 and I can close the same only after that date.
Can you clarify me in this regard
I have PPF A/c. My son is blind aged 33 In his name PPf a/c was opend at the his age was 15. Now he is matured. Can I Invest 1 lac in his A/c by gift to him for his future
Can interest accumulated in PPF every year can be claimed for income tax rebate in section 80? because is invested in the same ppf account.
Is it not an investment?
/Rahul
My Query is regarding redemption/surrender of PPF account after 7Years from date opening PPF Account. Let me know it is Possible to pay any penalty and withdraw our money which deposited during the 7 Years. ???? reason for withdrwal is Medical unfit want money for treatment.
One PPF a/c is in my name and also I have made investment in PPF acount on my wife’s name. Can i claim both amount for exemption under Section 80 C. My wife(Housewife) is not employed any where and not claiming this for any tax exemption.
I have open a ppf a/c in 1991 it is matured on 2006 & i have extend it for next 10 years, now maturity is in 2016 but i want to withdrawal full amount and close the account is it possible
Yes You can close the account after completion of 10 years and thereafter completion of each 5 years.
I have opened two PPF accounts on behalf of my two minor children. Now one is 20 years old and another is 17 years old. By next year two ppf accounts will be matured. I want to know if I close their account next year, whether they can again open fresh accounts on their name ?
Thanks and regards
could u pls clearify the minimum period of ppf account
father and mother already Postal PPF account holders,his 2 childrens minor
opening a new accounts interest exemption fully exempted please clarify
father already PPF account Holder,his son minor open a new ppf account income tax exemption Interest 2 accounts totally expeted are correct
please clarify
after 15 years completed i extended 5 years and the five years also completed
how many min years i open the account
In one finacial year if i canot deposite minimum amount in ppf a/c then what happens
Hi,
If I transfer my PPF account from one branch to another brach of the same Bank in the middle of the financial year, how does the interest be calculated? would it be effective from 1st April or from the date it got transferred to the new branch. Can you please clarify
Please guide me about tax benefit on PPF account for 2013-14 financial year.
I have opened PPF account last year and deposited entire amount in the month of March.How interest will be calculated on that amount?
This year i have deposited amount in three parts.how much interest will i earn for 2yrs.
Can i open PPF account online through ICICI. I have an account with that bank, and netbanking is enabled. If i deposit money after opening the account, how will i get the receipt to avail the tax benefit.
Can I withdraw funds from my Public Provident Fund (PPF) Account?
Customer can make one withdrawal every year, from the 7th financial year, of an amount that does not exceed 50% of the balance of the customer credit at the end of the fourth year immediately preceding the year of withdrawal or the amount at the end of the preceding year, whichever is lower.
Can I withdraw funds from my Public Provident Fund (PPF) Account?
Anytime after the expiry of 5 years from the end of the financial year in which initial subscription was made, a subscriber may withdraw 50% of the balance to his credit at the end of 4th year immediately preceding the year of withdrawal or amount at the preceding year which ever is lower. However, not more than one withdrawal is permitted in one financial year.
What is the correct position?
One can withdraw from 6th FY or 7th FY from the end of the financial year in which initial subscription was made?
SIR I WANT TO PROCEDURE OF FINAL WITHDRAWAL OF PPF ACCOUNTS
Vimal – you can do 3rd party transfer by creating NEFT beneficiary in favor of PPF A/C. and then depositing money..
If I invest 50000.00 per annul in ppf account. What is the benifit after 15 Years.
Hi,
I have made investment in PPF acount on my wife’s name. Can i claim this amount for exemption under Section 80 C. Also she is not employed any where and not claiming this for any tax exemption.
Thanks,
Sreenath
what is the meaning of rate of interest compounded annually?
My husband PPF A/C in kolkata. He is expired but in nomination my name.I shifted to ahmedabad. I am senior citizen. I want to close account. what is the procedure or My health is not good so without going kolkata it is possible to close account.
Pls advise , PPF account will be texable from 2013 onwards .
Thanks and Regards
I have a PPF a/c renewed after 15 yrs maturity. Now I want to close it before the expiry of the extended period but after maturity. What should I do?
Good write up. keep it up.
CA. Subhash Chandra Podder , FCA
kolkata
05/02/2013
if amount transferred by wife to her husband Rs.50,000 in the name of ppf a/c, the transfer amount will be deducted either wife or husband ?
answer was send to my mail
In question no 9 number of years given for withdrawl of fund is 7
But in last question it is given as 5
Which one is correct
hi i was working with one company and i want to withdrawn my pf amount but the company was shut down so what is a procedure to claim the same please advice me..
can PPF account be forfeited by any circumstances or an immunity is there.
Can husband and wife have separate PPF accounts
if payment of ppf Rs. 10000 deposit by wife to his husband account who will claim the ppf deduction.
In the write-up on maturity of a PPF a/c, ‘year’ refers to ‘financial year’ and not calendar year. For example, if a PPF a/c is opened on, say 1.5.2012, the maturity of the a/c would be 15 years after the end of financial year 2012-13 – i.e. it would mature for replayment on 1.4.2028, unless its duration is exended by filing the necessary extension form.
A LADY BEFORE MARRIAGE WAS HAVING PPF ACCOUNT OPENED BY HER FATHER, AFTER HER MARRIAGE AGAION A ACCOUNT IS OPENED AT HER HUSBANDS RESIDENTIAL PLACE. PRESENTLY THERE ARE TWO ACCOUNTS IN NAME OF SAME LADY IN HER NAME BEFORE MARRIAGE AND AFTER MARRIAGE.
WHAT IS REMEDY TO CLOSE ONE ACCOUNT ? WHAT WILL BE CONSEQUENCES FOR MAINTAINIG TWO ACCOUNTS?
Can a parent contribute 1 Lakh each in his and minors account? or is the investment limited to a total of 1L.
Thanking you,
Sudhin
if payment of ppf Rs. 10000 deposit by wife to his husband account who will claim the ppf deduction.
same if mother make payment in ppf in son a/c then who will claim ppf deduction.
please clarify and add some other questions of same pattern.
I have PPF A/c with SBI and I want to deposit PPF amount online banking through IDBI bank,so what is the procedure?