An amount of at least 500 rupees can be deposited into a PPF account, while a maximum of 1.5 rupees lakh can be deposited in the fiscal year. Income tax is not paid on interest received on a PPF account.
Public Provident Fund, known as PPF. It is a small savings fund provided by the government of India. Interest rates are set by the central government once in three months.
Full information on the PPF Account
You must have heard the PPF account name in the tax savings exercise. People may have told you this is a good savings plan. But due to the lack of knowledge and troubles in the PPF account, any unnecessary insurance policy may have been taken. No matter, you can invest money in PPF scheme at any time.
What is PPF – PPF Account Details
PPF means public savings fund, there is a savings plan provided by the government of India to its citizens which are placed in the Triple E category. That is, from start to finish on the money deposited in it, you will not have to pay any tax anywhere and anytime.
The General Savings Fund was created by the government of India in 1968. The aim was for the informal sector employees, who did not own the EPF facility, pensions, etc., to have an opportunity to save money for their future.
The PPF government kept tax-free for more people to adopt this scheme. Not only that, but the tax credit is also granted on PPF deposits under section 80C. This scheme is very popular for the time being. People embrace it because of tax savings and good interest rates.
Where can one open a PPF account?
You can choose any of the following options to open a PPF account
- You can open a PPF account in SBI. It also has facilities in associate banks.
- The facility to open a PPF account is also available at select branches of some nationalized banks.
If two accounts are opened, the other account will be treated as irregular. No interest will be paid on the amount deposited in the second account unless both accounts obtain permission from the Ministry of Finance.
You can also transfer your PPF account (PPF) from the post office to one bank, from one bank to another bank, or from one bank to the post office.
You can download a PPF account opening form from State Bank (SBI).
PPF Account – Minimum and maximum investment
You can invest at least Rs. 500 in PPF or a maximum of Rs. 1.5 lakh during the fiscal year. Even if the PPF is opened in the name of a minor child or citizen, no more than one and a half rupees lakh can be invested in the joint account of that minor and his guardian.
You can deposit funds into your PPF account at least 12 times a year. You can also deposit to the PPF account twice a month, but it should not exceed 12 times a year.
How many accounts in the family?
- Guardians cannot open separate accounts in the name of one child or minor.
- Suppose you have two children, then you can all open up to four accounts. Names of husband and wife, two children’s names, and a guardian.
Suppose you have opened a PPF account for yourself and your children. In such a case, the amount deposited as PPF in these three accounts should not exceed Rs 1.5 lakh.
Cannot open PPRI account NRI:
NRI means a non-resident Indian has no facilities to open a PPF account. However, if you have opened a PPF account while you are a citizen of India, you can follow it until the expiration of it (15 years).
According to the new PPF rules for NRIs, you can instantly withdraw funds from this account once the account is completed for 15 years. But if you do not withdraw the funds, you will be concerned with the rate of savings accounts.
Things to note in a PPF loan
- At least 500 rupees should be deposited into your account every year on a regular basis. If not, you will not be able to obtain a loan. Yes, if you deposited the minimum amount of Rs 500 in the previous year with a penalty, you are eligible for a loan.
- You cannot apply for a PPF loan twice in the same year.
- You cannot apply for a new loan until the previous loan is repaid.
- Even if you repay the loan within three months during the fiscal year, you will not get a new loan until the end of that fiscal year. After that, you will be able to apply for the loan in the next fiscal year itself.
- In a PPF loan, you will have to pay more than 2 percent of the benefits you receive in your account. Just as if you were getting 8 percent interest on your account, you would have to pay 10 percent interest on your loan.
- You must also repay the loan obtained from the PPF fund within 36 months. You can do this with a lump sum or a premium, at your convenience. If you do not pay off the loan during this period, the interest will be charged at 6% instead of 2 in the following fiscal year.
Close of a PPF account
Under normal circumstances, you cannot close a PPF account before 15 years. But you can get the facility to stop it in an emergency. By notification on 18 June 2016, the government of India facilitated the withdrawal of early withdrawal from the PPF account in emergency situations. According to the new rules, you can do early withdrawals in these cases.
- In the event that the account holder dies, his candidate or legal heir can apply to close the account. In such a case, he will not have to pay any kind of punishment, and he will get all of his money at full interest without any deduction.
- The account holder needs to treat himself, or any of his immediate relatives, with a serious disease. Here the closest relatives mean husband, wife, child, and parents. Note here that if you are making a premature withdrawal on a medical basis, you will have to show the appropriate documents approved by the competent authority.
- Account-holders can obtain facilities for closing premature accounts or higher education for their children. If higher education is a reason, you will also have to prove proof of admission to an institution in or outside the country. The bill of fees must also be shown. In both cases for medical or higher education, early closure requires that your account be at least five years old. Otherwise, you cannot benefit from premature closure.
- In this type of premature PPF closure, interest will be given 1% less than your fixed deposit rate. This penalty will be imposed on the entire amount deposited from start to finish.
So friends, hope you liked this article and you got some new information. Please tell me in the comments.