The Public Provident Fund is the darling of all tax saving investments. You invest in it and you get a deduction on your income. Besides, the interest you earn on it is tax-free. Since it is a scheme run by the Government of India, it is also totally safe.
PPF refers to Public Provident Fund and is a Long Term Debt Scheme of the Govt. of India on which regular interest is paid. Any Individual (whether Salaried or Self-Employed or any other category) can invest in this scheme and can earn a handsome tax-free return on the same which is usually higher than the return offered by Banks on Fixed Deposits.
Page Contents
- 1. Where You can open a PPF Account and How?
- 2. Who can and who cannot not open PPF Account?
- 3. You can have only one PPF account in your name
- 4. PPF Account cannot be opened Jointly with another individual
- 5. Minimum and maximum deposit limit for PPF
- 6. Continuing PPF after the 15 year period
- 7. Deposit date in payment of PPF by Cheque
- 8. Opening a PPF account for a minor
- 9. Loans on PPF Account
- 10. Benefit of Investing in PPF – Taxation of PPF
- 11. Premature withdrawal from PPF
- 12. Pre-mature closure of a PPF account is permissible only in case of death.
- 13. From which account can an NRI invest in the PPF account?
- 14. What happens on maturity of PPF Account of NRI?
- 15. What are the differences and similarities between the National Savings Certificate (NSC) and PPF?
- 16. Only the person actually depositing the PPF amount gets section 80C benefit
- 17. You cannot claim section 80C deductions for any amount deposited by you into PPF account of your parents’ or siblings’ accounts
1. Where You can open a PPF Account and How?
a. To open a PPF account, drop by a State Bank of India branch. SBI’s subsidiary banks can also open accounts. A list of these subsidiary banks is available on the bank’s Web site.You can even visit the nationalised bank in your neighborhood. Selected branches of nationalised banks can also open accounts.The head post office or selection grade sub-post offices also open PPF accounts.
b. You will have to fill up a form. You can take a look or download the form from SBI’s web site. Along with the form, attach a photograph and submit your Permanent Account Number. If you do not have a PAN, then furnish an attested copy of either your ration card, voter’s identity card or passport. When you open an account, you will be given a passbook (just like a bank pass book) in which all subscriptions, interest accrued, withdrawals and loans are recorded.
Image courtesy of Mister GC at FreeDigitalPhotos.net
2. Who can and who cannot not open PPF Account?
a. Who Can Open PPF Account – Any Individual (whether Salaried or Self-Employed or any other category) can invest in this scheme. HUFs are no more allowed to open any PPF account
b. Who Can Not open PPF Account- NRI’s are not allowed to subscribe to PPF Account. However, if someone opens a PPF Account while he is a Resident of India but subsequently becomes a NRI, he shall be allowed to continue investing in his account. An NRI can invest up to Rs 1,00,000 per financial year in an existing account, that is, an account that he opened prior to becoming an NRI. If someone inadvertently opened an account after becoming an NRI, it is best to close it before it comes to the attention of the concerned authorities in India.
3. You can have only one PPF account in your name
You can have only one PPF account in your name. If, at any point, it is detected that you have two accounts, the second account you have opened will be closed, and you will be refunded only the principal amount, not the interest. What if an Individual have two PPF Account in his/her name?
4. PPF Account cannot be opened Jointly with another individual
4. You cannot open a joint account with another individual. The account can only be opened in one person’s name. You are free to nominate one or more individuals. On the death of the account holder, nominees cannot keep the account going by making contributions. If there are no nominees, the legal heirs get the money. You can open one account for yourself and others for your child/ children. But, on your death, your children cannot make any additional contributions.Regularisation of PPF accounts opened in Joint names
5. Minimum and maximum deposit limit for PPF
A minimum deposit of Rs. 500 must be made during one whole financial year. The maximum that could be deposited is Rs. 1,50,000 in a financial year. The interest you will earn is currently wef 01.01.2018 is 7.60% per annum (compounded yearly). Deposits could be in either one go, or in flexible installments (in multiples of Rs. 100). You could vary the amount and the number of installments, as per your convenience, provided you do not exceed 12 installments in one financial year. Failing to deposit the minimum requirement, would lead to your account being discontinued. Interest would however continue to accrue. You could regularize the account again on paying the prescribed default fee along with subscription arrears.FM Increases PPF Investment Limit in a year to Rs. 1.50 Lakh
6. Continuing PPF after the 15 year period
The PPF account is valid for 15 years. The entire balance can be withdrawn on maturity, that is, after 15 years of the close of the financial year in which you opened the account. Once your account expires, you can open a new one. The only limitation is that you cannot withdraw it until seven years are completed, after which 50% of your deposits can be withdrawn, if needed.How to extend PPF account beyond 15 years
PPF account holders have an option of extending their accounts after the 15 year tenure with or without further subscription, for any period in a block of 5 years. The balance in the account will continue to earn interest at normal rate as admissible on PPF account till the account is closed. In case the account is extended without contribution, any amount can be withdrawn without restrictions. However, only one withdrawal is allowed per year.
If you continue the account after 15 years, with continued deposit, withdrawal up to 60 per cent of the balance at the beginning of each extended period (block of five years) is permitted.
7. Deposit date in payment of PPF by Cheque
In case of PPF account money deposited by means of a cheque or demand draft, the date of encashment / Realisation of the cheque or demand draft will be treated as the date of deposit. This issue becomes particularly relevant in respect of deposits made towards the end of the financial year by cheque / demand draft because if the same is not realised by March 31, then the same will be treated as deposits for the following financial year. This would also have ramifications in respect of the tax deduction being claimed by the individuals in a particular tax year. PPF Circular clarifying regarding reckoning of date of deposit
8. Opening a PPF account for a minor
Under PPF scheme, an individual may on his own behalf or on behalf of a minor of whom he is a guardian, open a PPF account. Further, either father or mother can open PPF account on behalf of his / her minor child, but both cannot open the account for same child. Instructions on opening of account for minor
9. Loans on PPF Account
Loans can be availed from the 3rd financial year excluding the year of deposit. Amount of such loans must not exceed 25 percent of the amount that stood to the account holder’s credit at the end of the second year immediately preceding the year in which the loan is applied for.
A fresh loan is not allowed when a previous loan or interest is outstanding. Interest is charged at a rate of 2% if repaid within 36 months and at 6% on the outstanding loan after 36 months. The repayment may be made either in lump-sum or in Installments.
10. Benefit of Investing in PPF – Taxation of PPF
a. Benefit u/s 80C – The Investments made in PPF Account are eligible for deduction u/s 80C
b. Tax Free Interest – No Tax is payable on the Interest Earned on PPF Account.
11. Premature withdrawal from PPF
The entire amount in your account could be withdrawn only on maturity. However, in times of financial crises partial withdrawals are permitted subject to certain ceiling limits. You could withdraw once a year, from the 7th year onwards. Such withdrawals, must not exceed, 50% of the balance at the end of the fourth year, or 50% of the balance at the end of the immediate preceding year, whichever is lower.Tax effect in case of premature closure of PPF Account
12. Pre-mature closure of a PPF account is permissible only in case of death.
The Interest Rate of PPF is decided by the Govt. The Current Interest Rate on PPF is 7.60%. The Interest is computed for a calendar month on the basis of the lowest balance in an account between the close of the 5th day and the end of the month and the Interest is credited to the account of the account holder at the end of the year.
13. From which account can an NRI invest in the PPF account?
An NRI can use funds in the NRE account or the NRO account to make investments in the PPF account. It is important to remember that the PPF rules require you to invest at least Rs 500 per financial year in the PPF account. If you fail to make the minimum investment in a year or years your account will be considered dormant. Subsequently, when you want to revive the account, you would need to invest Rs 500 for each year that you missed plus pay up a penalty of Rs 50.
14. What happens on maturity of PPF Account of NRI?
If you are an NRI at the time the deposit matures, you would need to withdraw the balance. An NRI is not eligible for extension on the PPF account. What happens if you leave the account unattended past the maturity date? “In such cases the account will be considered ‘extended without contribution’ in blocks of 5 years for an unlimited period of time. Extended without contribution means that the NRI will not have to make the minimum yearly investment of Rs 500. His account will continue to earn interest at the prevailing rate. According to the PPF deposit rules the extension can be made for an unlimited period of time.
15. What are the differences and similarities between the National Savings Certificate (NSC) and PPF?
| National Savings Certificate (NSC) | Public Provident Fund (PPF) |
| Interest Rate: 7.60 %, compounded annually but payable on maturity(wef 01.01.2018) | Interest Paid: 7.60 %,(wef 01.01.2018)compounded annually |
| No monthly/yearly payments | No monthly/yearly payments |
| Minimum investment: Rs 100 and in multiple of Rs 100/-
Maximum investment: No Limit |
Minimum investment: Rs 500 (required annually)Maximum investment: Rs 1,50,000 |
| Duration of investment: 5 years for NSC VIII Issue | Duration of investment: 15 years |
| Can be used as a security for mortgage and other purposes | Cannot be used for such purposes |
| Tax benefit under Section 80 ‘C’ available.Maximum limit: Rs 150,000 | Tax benefit under Section 80 ‘C’ available.Maximum limit: Rs 1,50,000 |
| Good medium-term investment option | Good long-term investment option |
| Interest accrues annually is taxable under Income From Other Source and is deemed to be reinvested and therefore allowed as deduction u/s 80C | Interest is fully Exempt |
Do consider opening a PPF account if you do not have one. You can put in as little as Rs 500 a year to keep it going.
16. Only the person actually depositing the PPF amount gets section 80C benefit
This means if your spouse deposits any amount into your PPF account, you will not be able to claim the deduction benefits under section 80C. Infact, your spouse will be able to (rightfully) claim section 80C deductions on his/her income.
17. You cannot claim section 80C deductions for any amount deposited by you into PPF account of your parents’ or siblings’ accounts
While tax laws allow you to claim 80C tax benefits for deposits into your spouses account, the same rule does not apply to your parents, siblings or relatives.
(Republished with amendments)
Author Bio
limit of deposit in minor a/c
if a/c is open in the name of minor then deposit limit is father & son is not more than 150000 is correct or not
example if father deposit rs 100000 in his self a/c then he can invest his minor son A/c rs 500000 means limit in both a/c is only 1500000 is correct or not
i have ppf a/c in sbi. i want to take pention plan. so can i take pention plan after 10Y opening my ppf a/c?
As per the Financial Rule-2014-2015(Budget) the maximum amount deposit to PPF A/c are Rs.1,50,000, if I am deposit Rs.2,00,000 through RTGS in my PPF A/c then It is possible ( i.e the amount can be show in my Pass book )
Hi, please update the max. limit of ppf in sbi from 1 lakh to 1.5 lakhs.
Thx
i was open my ppf ac in 2011 in pnb but they dint give any passbook, due to that region i cant pay any deposit .but i have e-generated receipt, now i want continue my ppf a/c what i do……tell me
Hi,
My son is 2.3 yrs old. Can I open PPF account on his name? As,I am told that he minor should be atleast 3 yrs old to open PPF account on his name. Is that true?
Dear sir,
I am having an Individual PPF Account in my name in which I deposit Rs.100,000 every year and claim deduction of Tax U/s. 80(C). I am having a 6 years old Daughter for whom I would like to open a minor PPF Account and I will be her Natural Guardian in this minor account. I would firstly like to know that if I open a minor PPF Account in her name, can I deposit 100,000 each in both the PPF Accounts every year. As she is a minor, her account will be clubbed in my Individual Account. So can I deposit 100,000 each in both accounts every financial year. I know that I can claim only 100,000 U/s. 80(C) in my Individual Account, but I would like to know whether I can deposit 100,000 each in both the PPF Accounts every year.
Awaiting your valuable and haste reply at the earliest.
Vishal Doshi
Sir
I already have a PPF account, Can I open another PPF account for my daughter, her age is 2.5 years.
Hi Sir,
i am paying rs.2000 monthly for ppf. is it possible to increase the payment to rs.5000 ?
Regarding PPF for minors….
I have been wanting to open a PPF account for my son who is almost 2 now. but when i approached the SBI bank, the manager said that the PPF for minor are no longer available. through some notification (probably in 2009 or 10) the same has been stopped. I knew this for HUF…but minors.
then i discussed this with few financial advisers…and there was a difference in opinion – some said it is no longer possible to open while other said it could be.
so what is the truth in this?
i just found out that IDBI is opening PPF in name of minors.
so what is the truth in all this????
i want to deposite in ppf account 100000 yearly. after 15 years i get how many total rupees with interest
Interest earned on PPF, is it required to be shown in IT returned
Is Withdrawal after the minimum lock in period of 7 years taxable or exempted?
My PPF has completed 25 years can renewed it further 5 years
it is with SBI
for Exemption under section 80C which amount should be take.
is balance of in PPF account or interest amount or amount which is deposited in the year 2013 – 14.
Pls tell me ppf investment ruppes after 5 year at widrow tex free or not.and also tell me loking period.
Dear Sirs,
Please also note that amount lying at the credit of PPF Account can not be attached by any Tax Authority or even by Court.
RASIK DAGLI
Dear Sir,
There is lot of confusion regarding total ppf investment limit including that of minor. Please clarify the same with proper references.
In my case I already have ppf accounts in the name of my kid and myself.
As I was not aware that one can contribute only a total amount of 1 lakh ( myself + my kid), I have exceeded the amount eg 1 lakh in my account and few thousands in my child’s account for past few years.Bank passbooks also show earned interests in both the accounts.
Please let me know what should I do now.
Dear All
Best time for depositing in PPF is 1st april and get maximum saving for your family.
Dear Sir,
Dear Sir,
There is lot of confusion regarding total ppf investment limit including that of minor. Please clarify the same with proper references.
In my case I already have ppf accounts in the name of my kid and myself.
As I was not aware that one can contribute only a total amount of 1 lakh ( myself + my kid), I have exceeded the amount eg 1 lakh in my account and few thousands in my child’s account for past few years.Bank passbooks also show earned interests in both the accounts.
Please let me know what should I do now.
Thanks
Dear Admin,
if i Invest my money in Feb or March in any FY ,
thn It should be count for Tax Benifity for that FY year or not?
bcoz v summint our Actual investment Declartion before 25th Jan of the same FY.
So plz helps me out ,
what should i have to do,,,
for invested amount in Feb and March ?
Ex.
FY 2011-12 Upto 25th Jan 2012 i Invested RS: 45000,
thn in Feb Rs: 1000, & March RS: 4000,
But in my Form 16 it’s Shows only RS: 45000,
so what about my Last 5000.
Intest of PPF is countable for IncomeTax Benefits ?
Hi,
I have opened a PPF a/c in 16th Sep’2012,So i got the interest only for 6 months.
So,if i deposit the yearly amount with 5th Sept of every year,can i get the interest of the same month or it will the opening date for calculating the interest for every year.
Waiting for your reply
Thanks,
Rajib
if my ppf is going to mature on 01.04.2014 can i deposit the amount in march 2014?
will i get deduction u/s 80C?
Hello,
Regarding PPF scheme, I want to know if my husband will be entitled to get tax benefit in case he deposits money in my PPF account using his bank account cheques in place of me. Or he has to open another (separate) PPF account to avail the tax benefits.
Please suggest.
Regards,
Isha
i was having ppf account in my son name on closer post office authority told that your son must present while collecting cheque whereas i was authorised to collect cheque whether they can insist account holder’s presence
“–Let’s say you open an account for your minor child. You can deposit Rs 70,000 in your account and Rs 70,000 in your child’s account. In this case you can in my opinion take the maximum benefit of Rs. 1,00,000/- U/s. 80C. As Limit of Maximum Investment in a year of 70000/- is fixed by Public provident Fund Act not by Income Tax law.–”
Could you please reconfirm the above mentioned statement if it true that you could invest more than 1.0 Lakh by opening an account in child name – I had the impression that maxu=imum investment in PPF could be 1.0 Lakh combining PPF accounts in your name or in name of your child/children.
Can I make contribution for more than one lac? (I know that I can claim for one lac only under 80C).
i have open my ppf account feb 1999 so i withraw my monery in feb- 13 or feb-14 please reply as early as possible
kiran
hi
I have two ppf ac. 1st post office in 2011 & 2nd Sbi in 2013.
I thought of transfer from post office Account to SBI, but post master is not accepting the new Accont Id given by SBI .
how to transfer from PostOffice to SBI ?
how to close Post office account ( they are not accepting) ?
waiting for your reply.
regards
Nishok
Dear sir
i have PPF account in SBI PGI Branch chandigargh, which was opened in 2005. but now it has been found that computer by mistake has taken the opening date 1998 and matured the account due to which i am suffering a lot. further type account is individual, but in CIF it is HUF, due to which branch is enable to extend it.
Kindly suggest me what i will have to do regarding the correction of date and type of account.
neeraj singhal
Dear sir
i have PPF account in SBI PGI Branch chandigargh, which was opened in 2005. but now it has been found that computer by mistake has taken the opening date 1998 and matured the account due to which i am suffering a lot. further type account is individual, but in CIF it is HUF, due to which branch is enable to extend it.
Kindly suggest me what i will have to do regarding the correction of date and type of account.
neeraj sighal
DEAR SIR,
I HAVE TRANSFER MY A/C FROM KOLKATA TO HYDERABAD IN THE MONTH OF JAN 2013.
AT THE TIME OF CALCULATION OF INTEREST BANK HAD PAID ME LESS INTEREST OF RS.9000/-APP.
ON VISIT TO THE BANK THEY STATED THAT IT IS GOVT A/C HENCE HE CANT HELP.
CAN YOU PROVIDE ME THE HIGHER AUTHORITIES DETAILS TO TAKE UP THE MATTER AND GET MY SHORT INT CREDITED TO MY A/C.
ASHOK KUMAR BAID
Sir,
I had opened a ppf account on my daughters name when she was below 18 years of age & I have also a separate account on my name.Now my daughter is above 18 years & she is self employed,so my main query is how to approach the bank to claim the tax benefit on her name because she wants to handle this ppf account independently.so please guide me how to approach the bank.
Hello Sir,
I forgot to deposit minimum amount of RS 500 in my (SBI) PPF account for financial year 2012-2013. If I pay amount with penalty then am I eligible to get tax benefit for financial year 2012-2013.
Please guide me how should I approach bank in this situation.
Thanks
Hi,
My PPF account matured when my status was resident & it was renewed with contribution. Subsequently (within a year) my status changed to NRI. What options do I have ? Can I continue with contributions into the account ? If I can continue, do I have an option to stop the contribution and close the account ? Appreciate help on this
My present age is 65. and open a ppf account . Suppose i expired at the age of 72 .Can my nominee will get the ppf amount at that point or they have to wait for 15 years . please reply.
Dear Sir,
There is lot of confusion regarding total ppf investment limit including that of minor. Please clarify the same with proper references.
In my case I already have ppf accounts (with SBI) in the name of my kid and myself. Total contribution p.a. has been more than Rs. 100k for last few years. Bank passbooks also show earned interests in both the accounts.
With arguments published on your site, it is in contradiction. Please cross-check the facts and clarify the situation for the benifit of all.
Thanks
A
kindly inform about the procedure of transfer of PPF account from one bank to another
If I invest 70000 Per Anum in PPF account. What is the benifit after 15 Years..
Plz do reply so that I can able to invest..
plz let me know the procedure of online applay for P P F .
i am a teacher and i have open an ppf a/c for rs 70000,per annum .what banifit will i have after 15 years of tanure .
In my ppf acc my father‘s huf can diposit 70000 and get tex benifit
i am house wife can i open this ppf account
i am planning for a ppf account.if i deposit 50000 per annum,then what will be the return in 15 years.
Sir,
I have deposited Rs 500 in PPF last year (29/02/12).As per my knowledge now interest rate is 8.8%. But yesterday (3/01/13 ) when I updated the Pass book they have shown Rs 4 instead of Rs 44 as interest amount .Can you please clarify how this is calculated .
Thanks
Ranjne
I have opened a PPF account recently. Can my wife open one in her name and I deposit money into it. She is a house wife. Do not have any income.
https://taxguru.in/income-tax/public-provident-fund-ppf-scheme-investment-limit-income-tax-benefit-features.html
Sir,
Maintaining PPF a/c since last 18 years or so in State Bank Of India,Cloth Market Branch,Sir Hukam chand Marg,Indore
In most of time I deposited cheque in the bank on 1st of the month but in most of cases they deposited the amount after 5th of the month and I always loose interest for the full amount.Where as in most of times the amount was debited to my bank on 3rd or 4th of the month but they never provided credit to my account.Many times I make complaints but nothing happened.Please guide what should I do.
hi
I have two ppf ac. 1st post office in 2010 & 2nd Sbi in 2013. bank manager suggested me to open 2nd and said no problem in opening 2nd.
will there be any legal issue? also can i close the later one?
waiting for your reply
thanks
shobhit
Hi,
kindly let me know , is the invenstment ammount variable ?
e.g. Suppose IF I invest 20,000/- Rs. for 1st 3 years, shall I incerase/decrease my investments in between.
Hi,
I am planning to open PPF account in ICICI bank. If i submit 40,000 Rs. each year in PPF account then what total ammount i will get after completion of 15 Years?
Is that ammount will be taxable? If yes, how much ammount i will get after tax deduction?
As, discussed with ICICI bank PPF amount will be tax fully exempt. What is it mean?