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Maxutils: PPF Scheme Features amp page

PPF A/C Scheme Features

  • Go To - PPF Calculator
  • Go To - Know Benefits of Sukanya Samridhi A/C

    Flash :- The government on 27.12.2017 slashed interest rates payable on PPF to 7.6% from 7.8% w.e.f. 01.01.2018. The rates w.e.f. 1986 is placed at the bottom of the page. PPF Calculator is updated with revised interest rates.(Earlier :- On 30.06.2017 interest rates payable on PPF was slashed to 7.8% from 7.9% w.e.f. 01.07.2017.)

    (A) PPF A/C Scheme : Highlights

  • An individual can have only one PPF account. However, he can open an account in his minor child's name.
  • The ceiling of amount deposited in PPF account increased to Rs. 1.50 lac.
  • Deposits made in PPF accounts ( Upto a maximum of limit of investment per annum ) are eligible for deduction under Section 80C of Income Tax Ac.
  • There is no concept of joint holding in a PPF account. It has to be in a single name only. You can however nominate your dependents to your PPF account.
  • Interest is computed on the minimum balance between the 5th and end of a month. If you are investing a lump sum to save tax, deposit the amount before march 5 of the year to get interest on your deposit. Therefore, to get interest on your deposit for the month in which the amount deposited; the amount be deposited before 5th day of the month.
  • You cannot offer the balance in your PPF account as collateral to take a loan. Nominee can claim the balance in the PPF account holder. they cannot continue the account or make additional contributions.
  • Balance in PPF account cannot be attached under court decree.
  • Entire deposit in a PPF account is exempt from the Wealth Tax.
  • 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/-.

    1-3 Cr By Age 50

    (B) PPF Scheme Amendments

    The Central Government on 21.06.2016 make the following amendments in the Public Provident Fund Scheme, 1968

    Premature closure of PPF Account

    A subscribers of the Public Provident Fund (PPF) can prematurely close his/ her account or the account of a minor of whom he is a guardian, on a written application to the Accounts Office, on any of the following grounds after completing five years.

    1. 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.
    2. 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 recognised institute of higher education in India or abroad.

    The premature closure shall be allowed only after the account has completed five financial years

    Interet on Premature Closure

    1% Lesser Interest on Premature closure of PPF Account will be payable on the interest rates as applicable from time to time

    C. PPF Scheme Features: Point Wise

    When PPF came into force

  • The scheme came into force on Ist July, 1968. [Issued vide Government of India, MOF (DEA) Notification No. GSR 1136 dated 15.6.1968 and further amended from time to time]

    Who can open a PPF Account

  • An individual can have only one PPF account in his name and may also subscribe on behalf of a minor.
  • Non Resident Indians are not eligible to open an account under the Public Provident Fund Scheme.
  • If a resident who subsequently becomes Non Resident Indian during the currency of the maturity period prescribed under Public Provident Fund Scheme, may continue to subscribe to the Fund till its maturity on a Non Repatriation Basis.

    Where the PPF account can be opened?

  • PPF accounts can be opened at designated branches of State Bank of India and its associate banks
  • Designated branches of other nationalized banks
  • All Head Post Offices and other designated Post Offices

    What are the tax benefits from PPF?

  • Deposits made in PPF accounts Upto a maximum limkit of Rs. 1,50,000/- eligible for deduction under limit of Section 80C of Income Tax Act.
  • On maturity, the entire amount including the interest is non-taxable.
  • Entire deposit in a PPF account is exempt from the Wealth Tax.

    1-3 Cr By Age 50
    Minimum And Maximum Amount that can be deposited?
  • Minimum amount of Rs. 500 and Maximum amount Rs. 1,50,000/- be deposited in a year.

    Number of subscription in a year

  • The subscription in multiples of Rs. 5 may, for any year, be paid into the account in one lump sum.
  • In Installments not exceeding twelve in a year.

    If fails to deposit amount in any year

  • A subscriber who fails to subscribe in any year according to the limits of minimum amount, may approach the Accounts Office for condonation of the default, on payment, for each year of default, a fee of Rs. 50 alongwith arrear subscription of Rs. 500 for each year.

    Transfer of PPF Account?

    A subscriber may apply for transfer of his account from one "Account Office" to another "Account Office" designated for this purpose.

    Withdrawals from the PPF Account

  • Any time after the expiry of five years from the end of the year in which the initial subscription was made.
  • A subscriber may, if he so desires, apply in Form C or as near thereto as possible, together with his pass book for withdrawing from the balance to his credit.
  • An amount not exceeding fifty per cent of the amount that stood to his credit at the end of the forth year immediately preceding the year of withdrawal or at the end of preceding year, whichever is lower, less the amount of loan, if any, which remains to be repaid.
  • Provided that not more than one withdrawal shall be permissible during any one year.

    Closure of account

  • Any time after the expiry of 15 years from the end of the year in which the initial subscription was made by him, a subscriber may, if he so desires, apply in Form C, near thereto as possible together with pass book.

    Continuation of account after maturity

  • On the expiry of 15 years from the end of the year in which the initial subscription was made but before then expiry of one year thereafter, may exercise an option with the Accounts Office in Form H, or as near thereto as possible, that he would continue to subscribe for a further block period of 5 years.

    Loan against PPF Account

  • Any time after the expiry of one year from the end of the year in which the initial subscription was made but before expiry of five years from the end of the year in which the initial subscription was made.
  • A subscriber may, he so desires, apply in Form D or as near thereto as possible, together with his pass book for obtaining loan not exceeding twenty five percent of amount that stood to his credit to at the ends of the second year immediately preceding the year in which the loan is applied for.

    Loan in Minor Child's account

  • Where the application is made by a person who has made subscriptions to the Fund on behalf of a minor of whom he is the guardian, he shall furnish a certificate in the following form to get loan as above, namely:-

    Repayment of loan and interest

  • The principal amount of a loan under this Scheme shall be repaid by the subscriber before the expiry of thirty six months from the first day of the month following the month in which then loan is sanctioned.
  • The interest on loan amount is plus 2% per annum against the prevailing interest rates.

    Nomination and repayment after death

  • subscriber to the fund may nominate in Form E or, as near thereto as possible, one or more persons to receive the amount stading to his credit in the event of his death before the amount has become payable or, having become payable,has not been paid.
  • No Nomination shall be made in respect of an account opened on behalf of minor

    Rate of Interest payable in PPF Account?

  • Interest at the rate, notified by the Central Government in official gazette from time to time, shall be allowed for calendar month on the lowest balance at credit of an account between the close of the fifth day and the end of the month and shall be credited to the account at the end of each year.
  • Provided that where the interest to be credited contains a part of a rupee. Then, if such part is fifty paise or more, it shall be increased to one complete rupee, and if such part is less than fifty paise, it shall be ignored.
  • Public provident fund (PPF) will earn an interest of 7.6% w.e.f. 01.01.2018.

    PPF Interest Rates Over a Period of Time from April-1986

    Period Rate
    01.04.1986 to 14.01.2000 12%
    15.01.2000 to 28.02.2001 11%
    01.03.2001 to 28.02.2002 9.5%
    01.03.2002 to 28.02.2003 9%
    01.03.2003 to 30.11.2011 8%
    01.12.2011 to 31.03.20128.6%
    01.04.2012 to 31.03.2013 8.8%
    01.04.2013 onward 8.7%
    01.04.2016 onward 8.1%
    01.10.2016 onward 8.0%
    01.04.2017 onward 7.9%
    01.07.2017 onward 7.8%
    01.01.2018 onward 7.6%

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