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Features
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Returns
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Interest 8.7% p.a. (compounded annually), w.e.f. 01-Apr-2013, is credited to
the PPF account at the end of each financial year.
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Investment
Limitation
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Min Amount :Rs. 500/- and additional investment in
multiples of Rs 5/-
Max Amount Rs. 1,00,000/-
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Scheme
Availability
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A PPF account can be opened at anytime during the year.
It is open all through the year.
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Mode
of Operation
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- Single
- Joint
(Two or more)
- Minor
with parent/guardian
An individual cannot invest on behalf of HUF
(Hindu Undivided Family) or Association of persons. |
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Nomination
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Nomination can be done at the time of opening the account
or during the tenor of the account.
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Tenure
of Investment
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15 years from the date of initial investment with a block
of 5 years there-after upto a max of 30 years incl. 15 years.
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Maturity
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The PPF account matures after 15 years. One can then
exercise on option of continuing the account for an additional
block of 5 years or close it.
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Loans
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The first loan can be taken in the
3rd financial year
from the date of opening of the account, or upto 25% of the
amount at credit at the end of the first financial year. The
facility can be availed of any before expiry of 5 years from
the end of the year in which the initial subscription was
made. The loan is repayable either in lumpsum or in convenient
installments numbering not more than 36.
The rate of interest charged on loan taken by
the subscriber of a PPF account on or after 01.12.2011 shall
be 2% p.a. However, the rate of interest of 1% p.a. shall
continue to be charged on the loans already taken or taken up
to 30.11.2011.
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Withdrawal
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A withdrawal is permissible every year from the
7th
financial year of the date of opening of the account, of an
amount not exceeding 50% of the balance at the end of the 4th
proceeding year or the year immediately proceeding the year of
the withdrawal, whichever is lower, less the amount of loan if
any.
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Tax
Benefits
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Tax benefits can be availed under sections 88 for the amount
invested. Interest accrued is Tax free.
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Tips
for Investing
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- Apart
from a Post Office, a PPF account can also be opened in
SBI & its associates and other select nationalized
banks.
- The
most popular tax saving instrument which gives a rebate
under section 88.
- A
PPF account cannot be attached by the Govt. or any court
of law or through any decree.
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Terms
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Who
can open a PPF account ?
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A PPF
account can be opened by an individual on his own behalf or on
behalf of a minor of whom he is the guardian or on behalf of an association of persons or a body of
individuals. An individual can open only one account for
himself.
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Transfer
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The account can be
transferred at the request of the
subscriber from one office to another, including from Bank to
Post Office and vice- versa all over the country.
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Nomination
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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 a minor.
In the event of the 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 fifteen
years. Legal hairs can claim the amount upto Rupees One Lakh
without production of succession certificate after observing
certain formalities.
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Payment
Default
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If the PPF account-holder fails to
deposit the minimum Rs 500 in a given financial year, the
account is considered as discontinued but the interest will
continue to accrue and be paid at the end of the term. Loans
and withdrawals are not allowed. This account can be revived
on payment of a fee of Rs 50 for each year of default, along
with the arrears of subscription of Rs 500 for each such year
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Termination
of an Account
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No PPF
account can be terminated before its completion. However, if
requests for premature closure of PPF accounts and refund of
deposits from the subscribers are genuine in nature, such
cases can be dealt with under Rule 13 of the scheme.
Since no withdrawal is permissible before the expiry of four
years from the end of the year in which the account was opened
vide para 9 (withdrawal) of the scheme, the request for
termination or closure of accounts can be considered only
after the expiry of the said period.
For example, the request for premature closure of accounts
opened in 1988-89 can be considered only after 1.4.1994.
Such requests may, therefore, be forwarded to the Ministry of
Finance alongwith the following information -
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- Name
and address of the account holder
- Account
number
- Date
on which the account was opened
- Loans
availed of if any from the account with dates and position
regarding repayment
- Satisfactory
reasons given for the request and evidence in support
thereof
- Designation
and address of the income tax authority under whose
jurisdiction the subscriber falls
- Any
other information relevant to the request.
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Free
from any Attachment
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A PPF account is free from any attachment under any order
or decree of a court in respect of any debt or other liability
incurred by him
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PPF
for NRIs
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Non
Resident Indians may also open a PPF account out of the funds
in the applicant's non-resident account in India in banks
subject to the following conditions -
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- The
account is marked as non-resident account
- All
credits therein or debits thereto are made subject to the
same regulations as are applicable to non-resident
account.
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