PPF Account 2021. PPF is the acronym of “Public Provident”. This was initially started by the Government to provide retirement benefits to self employed individuals and workers in the unorganized sector. As the income of people in this sector is very low and moderate ,they can’t invest some thing for their future…. So the government of India introduced this scheme so that compulsory savings obligation can be effective for these class of employees.This was framed under the PPF Act of 1968.
Benefits of PPF (Public Provident Fund) Account
- Deposits can be made in lump-sum or in 12 installments.
- Joint account cannot be opened.
- Account can be opened by cash/cheque and In case of cheque, the date of realization of cheque in Govt. account shall be date of opening of account.
- Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another.
- The subscriber can open another account in the name of minors but subject to maximum investment limit by adding balance in all accounts.
- Maturity period is 15 years but the same can be extended within one year of maturity for further 5 years and so on.
- Maturity value can be retained without extension and without further deposits also.
- Premature closure is not allowed before 15 years.
- Deposits qualify for deduction from income under Sec. 80C of IT Act.
- Interest is completely tax-free.
- Withdrawal is permissible every year from 7th financial year from the year of opening account.
- Loan facility available from 3rd financial year.
No attachment under court decree order.
- The PPF account can be opened in a Post Office which is Double handed and above.
Interest Rates of PPF Account
From 1.04.2020, interest rates are as follows:- 7.10% per annum (compounded yearly).
|Type of Account||Minimum Amount for Opening||Minimum Deposit||Maximum Deposit|
|Public Provident Fund(Individual account on his behalf or on behalf of minor of whom he is the guardian)||INR 100/-||INR. 500/- in a financial year||INR. 1,50,000/- in a financial year|
Who Can Open a PPF Account ?
President individuals can open this account. And PPF account can also be opened by parent under the name of a minor. However, each person is eligible for opening one account on their name.
Who are not eligible ?
Non-resident Indians are not eligible to open an account., Hindu Undivided Family can NOT open an account under the scheme ,Since 13th May, 2005. But accounts opened prior to that date may continue subscription to their account till maturity. If a resident of India becomes NON Resident during the period mentioned by PPF act can operate their account till it maturity.
Documents Required for PPF Account:
- Form A for opening the account.
- Copy of PAN card.
- proof of residence i. e, Passport / Electricity Bill.
- Photograph of passport size.
Where can it be opened :
- State bank of India
- Subsidiaries of SBI.
- National banks which were given authority to operate the account.
- Authorized banks.
Important features :
1.One person – One account :
No one is allowed to have More than at any point in your life
you are allowed to have only one PPF account in your name. If at any time it is found that you have more than one account in your own name, the second account will be immediately deactivated, and you will be eligible to get only principal amount.
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2.No premature closure :
premature closure of the account is not allowed. Only in the case of the death of a customer, their nominee or legal successor can close the account by submitting the required documents as said by the Ministry of Finance.
3. Nomination :
PPF Scheme facilitates nomination for one or more persons to receive the amount standing to the subscriber’s credit in case of death. However, no nomination is possible in case of minor account. Subscriber of PPF is allowed to change the previous nomination by applying fresh on nomination form H.
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4. Maturity :
PPF is a 15 years scheme. Thus, as per rules of PPF scheme Public Provident Fund account gets matured after the completion of 15 years from the end of the year in which the account was opened. However, on maturity this period can be extended to any number of times. But it’s for a block of 5 years each time. This can be done by furnishing Form H within one year from the date of maturity.
5. Minor child :
An account can be opened on the name of a Minor child by the parents or guardian of the child.
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6. Taxation :
The amount deposited into this scheme is allowed as deduction up to 1,00,000 from the total income of an assessee under section 80c of income tax act ,1961.Contributions to PPF accounts of even the spouse and or children are also eligible for tax deduction.
7. Interest from PPF :
The amount of return earned in the form of interest from PPF is exempted from tax.
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