WHAT IS PUBLIC PROVIDENT FUND (PPF)?
The Public Provident Fund (PPF) is a savings-cum-tax-saving instrument in India, introduced by the National Savings Institute of the Ministry of Finance in 1968.
The main objective of the scheme is to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits.
The scheme is fully guaranteed by the Central Government. Balance in the PPF account is not subject to attachment under any order or decree of court under the Government Savings Banks Act, 1873. However, Income Tax & other Government authorities can attach the account for recovering tax dues. The balance of a PPF account is fully exempt from wealth tax.
Public Provident Fund Scheme, 2019 introduced by the Government on 12 December 2019 and with the new scheme the earlier Public Provident Fund Scheme, 1968 as amended from time to time is rescinded.
FEATURES OF PUBLIC PROVIDENT FUND (PPF)?
Investment Limits A minimum of Rs.500.00 subject to a maximum of Rs.1,50,000 per annum may be deposited.
Original duration is 15 years. Thereafter, on application by the subscriber, it can be extended for 1 or more blocks of 5 years each.
The rate of interest is determined by Central Govt. on quarterly basis. At present it is 7.10% per annum with effect from 01.04.2020.
Loans and withdrawals are permitted depending upon the age of the account and balances as on the specified dates.
Income Tax benefits are available under Sec 88 of IT Act.
Nomination facility is available in the name of one or more persons. The shares of nominees may also be defined by the subscriber.
The account can be transferred to other branches/ other banks or Post Offices and vice versa upon request by the subscriber. The service is free of charges.
HOW TO OPEN PUBLIC PROVIDENT FUND ACCOUNT (PPF)?
A PPF account can be opened with either a Post Office or with any nationalised bank like the State Bank of India or Punjab National Bank, etc. These days, even certain private banks like ICICI, HDFC and Axis Bank among others are authorized to provide this facility.
You need to submit below mentioned documents.
Duly filled account opening application form.
KYC documents such as Aadhaar, Voters ID, Driving license, etc.
Residential address proof.
Nominee declaration form.
Passport size photograph.
Post submitting these documents you can deposit a prescribed amount towards the opening of the account.
WHAT IS THE INTEREST RATE OF PUBLIC PROVIDENT FUND (PPF)?
The current interest rate is 7.1% p.a. that is compounded annually.
ELIGIBILITY FOR OPENING PUBLIC PROVIDENT FUND (PPF)?
Individuals in their own name as well as on behalf of a minor or a person of unsound mind can open the account at any Branch.
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