PUBLIC PROVIDENT FUND RULES -- PPF
§
The Public
Provident Fund Scheme is a statutory scheme of the
Central Government
of India.
§
The
Scheme is for 15 years.
§
Public
Provident Fund Interest Rate is fixed by the Ministry of Finance,
Government
of India , annually, and at present is 8.7% compounded
annually
(as of April 1st 2014 –March 31st 2015).
§
The
minimum deposit is 500/ - and maximum is Rs. 1,50,000/
in a
financial year.
§
One
deposit with a minimum amount of Rs.500/ -
is
mandatory in each financial year.
§
The
deposit can be in lump sum 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/
- per FY.
§
It is not
mandatory 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
account in which deposits are not made for any reasons is treated as
discontinued
account and such account can not be closed before maturity.
§
The
discontinued account can be activated by payment of minimum deposit of
Rs.500/- with
default fee of Rs.50/ -for each
defaulted year.
§
Account
can be opened by an individual or a minor through the guardian.
§
Joint
account is not permissible.
§
Those who
are contributing to GPF Fund or CPF/PF account c
an also
open a PPFaccount
.
§
A Power
of attorney holder can neither open or operate a PPF account.
§
The grand
father/mother cannot open a PPF account on behalf of their minor
§
grand son/daughter.
§
The
deposits shall be in multiple of Rs.100/-subject to minimum amount of
Rs.500/
-
.
§
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.
§
According
to Public Provident Fund Scheme 1968, the facility of loan against
the PPF
deposits is available from 4th to 6th year of deposit to the extent of 25 %
of the
amount deposited as at the end of the last financial year. The loan is
repayable
in 36 months. There is a lock -in period of 15 years and the money can be withdrawn
in whole after its maturity period. However, pre-mature withdrawals can be made
from the end of the sixth financial year from when the commenced. The maximum
amount that can be withdrawn pre-maturely is equal to 50% of the amount that
stood in the account at the end of 4th year preceding the year in
which the amount is withdrawn or the end of the preceding year whichever is
lower.
§
Public
Provident Fund Withdrawal or Pre-mature 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 can not
continue
the account, but account has to be closed.
§
The
account holder has an option to extend the PPF account for any period in a
block of
5 years on each time.
§
The
account holder can retain the account after maturity for any period without
making
any further deposits. The balance in the account will continue to earn
interest
at normal rate as admissible on PPF account till the account is closed.
§
One
withdrawal in each financial year is also admissible in such account
held beyond
15 years subject to a ceiling of 60% of the balance at the end of the 15 year
term
.
§
The PPF
scheme is operated through Post Office and Nationalized banks
through
its authorized branches as per GOI notification
.
{
Presently Bank of India is having 275+1250(new approved on 1.8.2014) branches }
§
Account
is transferable from one Post office to another and from Post office to
Bank and from
Bank to Post office.
§
Account
is transferable from one Bank to another bank as well as within the
bank to
any branch.
§
Deposits
in PPFqualify for rebate under section 80 -C of Income Tax Act
.
§
The
interest on deposits is totally tax free.
§
Deposits
are exempt from wealth tax.
§
The
balance amount in PPF account is not subject to attachment under any order or decree
of court in respect of any debt or liability.
§
More than
one person nomination facility available.
§
Best for
long term investment.
§
Bank of
India is one of the best Bank where deposits are accepted intersol and
since it
provides better flexibility like standing instructions through net Banking.
§
The forms
are available on Bank’s website under Download( please see it on the
bottom of
your web page)
Documents
Required for PPFAccount
Documents
for the PPF account are similar to the any other account in banks.
·
A recent
passport size photograph.
·
Identity
Proof copy with original to verify( Even PAN Card may be accepted as all tax
payers are having it)
Address
Proof copy with original to verify
·
Account
opening form for PPF( available on Bank’s website)
·
Paying in
slip for PPF a/c ( available on Bank’s website)
·
Nomination
form for PPF ( available on Bank’s website)
·
Account
number of the saving account in respective bank( if you are having you’re a/c
with the Bank)
·
If net
banking has not yet been taken, it is better to take it in your SB A/C for which
a simple form for net Banking is to be filled for existing a/c holders. If you
are opening new a/c then you may opt for Welcome KIT in whichyou will receive
Debit card,Net Banking and cheque
book
instantly
·
There are
275 old branches the list of which is available on Bank’s website under
download.
1250 more
branches have been authorizedon 1stAugust,2014 by official Gazette Notification
of GOI Ministry of Finance. These branches may provide you your passbook later
on as
they may
not be having ready stationery with them but they may complete other
formalities.
·
The best
time for deposit in the PPF a/c is between 1stto 5th
of the
month as any amt deposited upto 5thof the month ( Interest is calculated on the
balance between 5thand last day of the month)
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