Public Provident Fund (PPF Account)
Overview
The Government of India has authorised IDBI Bank to receive subscriptions to PPF Accounts through its All branches across India.
Salient Features of the Scheme
ELIGIBILTY
Individuals in their own name as well as on behalf of a minors can open the account at any designated Branch. As per extant rules, opening of PPF accounts in the name of NRIs & Hindu Undivided Family is not permitted.
TRANSFER OF ACCOUNT
The account can be transferred from other banks or Post Offices and vice versa upon request by the subscriber, free of charges.
SUBSCRIPTION LIMITS
Minimum of Rs.500/- and a maximum of Rs.1,50,000/- per financial year may be deposited. Any amount in excess of Rs.1,50,000/- in a financial year shall neither earn any interest nor will be eligible for rebate under the Income Tax Act. The amount can be deposited in lump sum or in a maximum of 12 instalments per year.
Maturity Period
15 years. Extendable for 1 or more blocks of 5 years each after maturity.
RATE OF INTEREST
As declared by Government of India time to time.
TAX BENEFITS
Income Tax benefits are available under Sec 80C of the IT Act. Interest income is also totally exempt from Income Tax. Amount outstanding to the credit is fully exempt from Wealth Tax.
NOMINATION
Nomination facility is available in the name of one or more persons.
LOANS
A depositor can avail loan against balance in the PPF account in the third financial year. Rate of Interest for Loan will be 2% above the rate of interest on PPF.
Partial Withdrawal
Partial withdrawal is allowed once every year but after the expiry of 5 years from the end of financial year of the initial deposit in the PPF account.Premature Closure
Premature Closure is allowed only after the account or the account of the minor account holder of whom he/she is the guardian has completed five financial years,where:A subscriber shall be allowed premature closure of his account or the account of a minor of whom he/she is the guardian, only after the account has completed five financial years, on any of the following grounds namely:
a) that the amount is required for the treatment of serious ailments or life threatening diseases of the account holder, spouse or dependent children or parents, on production of supporting documents from competent medical authority;
b) that the amount is required for higher education of the account holder or the minor account holder, on production of documents and fee bills in confirmation of admission in a recognized institute of higher education in India or abroad.
Provided further that premature closure shall be subject to deduction of such amount, which shall be equivalent to one per cent less interest on the interest rates as applicable from time to time.
Disclaimer
PPF (Amendment Scheme) 2016 and other Small Savings schemes are implemented by National Savings Institute, under Ministry of Finance. Customers are requested to visit government site for latest instructions regarding these schemes.Please click on below links for list of authorised branches, FAQs and FORMS.