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| Public Provident Fund
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Salient Features
- The Public Provident Fund Scheme is a statutory scheme of the Central Government of India.
- The Scheme is for 15 years and may be extended in blocks of 5 years by the investor.
- The rate of interest is is declared by the Ministry of Finance and may change every quarter.
- The maximum is Rs. 1,50,000/- p.a
- Interest is totally tax free.
- Saving under this qualifies as a Tax Saving instrument under section 80C.
- Loan facility available from the seventh year.
- One deposit with a minimum amount of Rs.500/- is mandatory in each financial year.
- The deposit can be in lumpsum or in convenient installments, not more than 12 installments in a year or two installments in a month, subject to total deposit of Rs.1,50,000/-.
- It is not necessary to make a deposit in every month of the year.
- The amount of deposit can be varied to suit the convenience of the account holders.
- The minimum deposit is 500/- p.a. and failing to do so would mean that the account is deemed to be discontinued, and such an account cannot be closed before maturity.
- The discontinued account can be activated by payment of the minimum deposit of Rs.500/- with default fee of Rs.50/- for each defaulted year.
- The account can be opened by an individual or a minor through the guardian.
- Joint account is not permissible.
- A Power of Attorney holder can neither open nor operate a PPF account.
- The grand father/mother cannot open a PPF on behalf of his/her minor grand son/daughter.
- The deposit in a minor account is clubbed with the deposit of the account of the guardian for the limit of Rs. 1,50,000/-.
- No age is prescribed for opening a PPF account.
- The facility of first withdrawal in the 7th year of the account subject, to a limit of 50% of the amount at credit preceding three year balance.
- Thereafter one withdrawal in every year is permissible.
- Premature closure of a PPF Account is not permissible except in case of death.
- Nominee/legal heir of PPF Account holder on death of the account holder cannot continue the account.The account has to be closed in such case.
- A PPF account can be opened either in a Post Office or in a Nationalsed Banks.
- The Account is transferable from one Post Office to another and from Post Office to Bank or from a Bank to a Post office.
- Account is transferable from one Bank to another bank as well as within the bank to any branch.
- Deposits in PPF qualify for rebate under section 80-C of Income Tax Act.
- The interest on deposits is totally tax free.
- The balance amount in the PPF account is not subject to attachment under any order or decree of court in respect of any debt or liability.
- Nomination facility is available.
- To know more or open a PPF account, get in touch with our Financial Experts.
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