Highlights of Public Provident Fund
Public Provident Fund, popularly known as PPF, is a savings cum tax saving instrument. It also serves as a retirement planning tool for many of those who do not have any structured pension plan covering them.
Public Provident Fund account can be opened at designated post offices throughout the country and at designated branches of Public Sector Banks throughout the country. The account can be opened by an individual in his own name, on behalf of a minor of whom he is a guardian, or by a Hindu Undivided Family.
- Minimum deposit required in a Public Provident Fund account is Rs. 500 in a financial year. Maximum deposit limit is Rs. 1,50,000 in a financial year. The maximum number of deposits is twelve in a financial year.
- The account matures for closure after 15 years. The account can be continued with or without subscriptions after maturity for block periods of five years. Premature withdrawal is permissible every year after completion of 5 years from the end of the year of opening the account.
- Loans from the amount at credit in Public Provident Fund amount can be taken after completion of one year from the end of the financial year of opening the account and before completion of the 5th year.
- Interest at the rate notified by the Central Government from time to time is calculated and credited to the accounts at the end of each financial year.
- Income Tax rebate is available “on the deposits made”, under Section 88 of Income Tax Act, as amended from time to time.
- Interest credited every year is tax-free.
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Subscription and Frequencyinimum amount of Rs. 500/- p.a. in multiple of Rs. 5/- is to be deposited in a PPF account in the financial year.
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Terms and Transferabilityan transfer his Public Provident Fund account from one office of SBI or its associates to Head Post Office or vice versa.
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Loan Facility in PPFn can be taken after the expiry of one year from the end of the year in which initial subscription is made but before the expiry of five years from the end of the year in which initial subscription was made. Application for the same has to be made in form D (Download Form D for PPF Loan).
Withdrawal from Public Provident Fundubscriber can avail the withdrawal facility from the PPF account after the expiry of the 5 financial years from the end of the year in which the initial subscription was made by applying in form C.
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Tax, Interest and Other Benefitsterest recoverable against the loan taken from PPF account shall accrue to the Central Government.
Nomination in Public Provident Fundion can be done in the name of one or more persons.
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Other Important Provisionsth of the account holder, the account can either be closed or continued without contribution. If it is not closed, it continues to earn interest but fresh contribution and partial withdrawal are not permitted.
- Close the Account,
- Continue the account till it matures,
- Fresh contributions are too allowed.
- Open new PPF account,
- Raise a loan,
- Take withdrawals