New Public Provident Fund Scheme 2020: We provide you here the complete detail about Public Provident Fund (PPF) like maturity period, interest rates, changes, premature close, withdrawal, benefits, calculators, how to open, loan facility, tax benefits, partial withdrawal, closing PPF account etc.,
Table of contents
- Changes Made w.e.f. 12-12-2019
- New PPF Scheme Quick Briefs
- Interest Rates
- Maturity Period
- Tax Benefits
- Who Can Open PPF Account?
- Numbers of PPF Account
- Minimum and Maximum Deposit
- Penalty to Fail Deposit Minimum Amount
- Payment Mode
- Interest Rates
- How to Open a PPF Account?
- Where to Open PPF Account?
- List of All Forms Related to PPF Account
- Loan Facility on PPF Account
- Partial Withdrawal
- Premature Closure
- How to Close PPF Account at Maturity?
- Tips to Extend Return and Tax Benefits
Changes Made w.e.f. 12-12-2019
|Particulars||Old Scheme||New Scheme w.e.f 12-12-2019|
|Initial Minimum Amount||Rs.100||Rs.500|
|Limit of Deposit Numbers||12||No Limit|
|Interest Rate||Please See Table Below||Please See Table Below|
|Interest Rate on Loan Taken||2% pa||1% pa|
New PPF Scheme Quick Briefs
Here are the salient features of Public Provident Fund Saving Scheme.
|Maturity Period||15 Years|
|Deposit Time Frame||15 Years|
|Tax Benefits on Interest||Yes Available, Interest is Tax Free|
|Tax Benefits on Deposits||Deduction 80C available|
|Who Can Open PPF Account||Any Resident Individual|
|Joint Account Availability||No|
|Number of Accounts Allowed||Only One|
|Minimum deposits in an account in a F.Y.||Rs.500|
|Any Default While Making Minimum Deposits||Discontinued Account|
|Penalty for Revival Discontinued Account||Fee of Rs.50 per year with minimum payment of Rs.500 per year|
|Max Deposit in a Year||Rs.1,50,000|
|Interest Rate||7.1% per annum (April 2020 to June 2020) 7.9% per annum (Interest rate can change from time to time after account is opened)|
|Premature Closure of Account||Allowed on certain conditions|
|April 1986 – January 2000||12.0%|
|January 2000 – February 2001||11.0%|
|March 2001 – February 2002||9.5%|
|March 2002 – February 2003||9.0%|
|March 2003 – November 2011||8.0%|
|December 2011 – March 2012||8.6%|
|April 2012 – March 2013||8.8%|
|April 2013 – March 2016||8.7%|
|April 2016 – September 2016||8.1%|
|October 2016 – March 2017||8.0%|
|April 2017 – June 2017||7.9%|
|July 2017 – December 2017||7.8%|
|January 2018 – September 2018||7.6%|
|October 2018 – March 2019||8.0%|
|April 2019 – June 2019||8.0%|
|July 2019 on wards||7.9%|
|April 2020 to June 2020||7.1%|
The maturity period under new Public Provident Fund scheme is 15 years from the end of the financial year in which the account was opened.
Note: There is some confusion that the maturity period will be counted from the date of opening of the account. But it is clearly mentioned in the government notification that a maturity period of 15 years is not be reckoned from the date of opening of account but from the end of the relevant financial year in which the account is opened.
There are lots of tax benefits under new Public Provident Fund Scheme.
- First, interest is totally tax-free under section 10(11) of the income-tax Act.
- Any maturity payment from the PPF account whether it is premature, withdrawal is totally tax-free.
- Any amount deposited is eligible for deduction under section 80C up to the limit of Rs.1,50,000 .
Note: Any repayment of loan against PPF account is not treated as investment. So any repayment will not be treated as investment and deduction will not be eligible under section 80C.You can get the benefit of deduction under section 80C on the name of yourself, spouse, and your child.
Who Can Open PPF Account?
- Any individual resident citizen of India above 18 years of age.
- You can open account on your name or on behalf of each minor or a person of unsound mind or whom you are the guardian.
- The account holder of a discontinued account shall not be eligible to open a new account before closure such discontinued account after maturity.
Notes: No, foreign nationals can’t open accounts under the new Public Provident Scheme.
If a person becomes Non-resident Indian during the period the account is in operation then he is allowed to premature close the account.
On such premature closure, the interest in the account shall be allowed at a rate which shall be lower by 1% then the rate at which interest has been credited in the account from time to time since the date of opening of the account, or the date of extension of the account as the case may be.
Numbers of PPF Account
- You can open only one PPF account in your own name. You can only open another account after previously opened account is closed on maturity or prematurely.
- You can also open one account in the name of a minor or a person of unsound mind.
- The number of accounts per family is 4 accounts i.e. parents +2 children.
Minimum and Maximum Deposit
The minimum amount of deposit in PPF account is Rs.500 and maximum is Rs.1,50,000. The total deposit in a year as above shall be inclusive of deposits made in respect of years of default of the preceding years but excluding the default fee.
Penalty to Fail Deposit Minimum Amount
- The PPF account will be treated as discontinued account.
- The discontinued account can not be revived till the maturity. However, the interest rate applicable to the scheme from time to time. The loan and partial withdrawal shall not be allowed in such account. The account holder can not open another account on his name till the closure of such account.
- The revival of discountinued PPF account is possible before the maturity only by paying a fee of Rs.50 per year of default and minimum contribution of Rs.500 per year of default.
- You can pay in cash in Indian rupees.
- You can also pay by crossed Cheque, a Demand Draft or Pay Order.
- You can pay by submitting a signed withdrawal form in respect of a saving account in the same account officer.
- You can pay also by online mode.
- The interest rate is 7.1% from April to June 2020.
- The interest will be calculated for a calendar month on the lowest balance at the credit of an account between the close of the 5th day and the end of the month. The interest shall be credited to the account at the end of each year.
How to Open a PPF Account?
It is very easy to open PPF account. You should follow the below steps.
- You should need to fill the application form to open PPF account.
- There are very basic information which you need to fill in the PPF account opening application form like Name, Father Name, PAN, Aadhaar Number,
- You should attach valid documents like identity proof and address proof with PPF account opening application form like Passport, Driving License, Voter’s ID Card, Job cards by NRGA, etc.
Where to Open PPF Account?
You can open PPF account only in the designated branches of SBI and its subsidiaries, ICICI Bank, Axis Bank, HDFC Bank, Central Bank of India, Bank of India, Punjab National Bank, Indian Overseas Bank and Post office.
|List of Forms||Nature of the Form|
|Form A||For opening a Public Provident Fund account|
|Form B||For making deposits in the PPF account and repaying the loans against the PPF account|
|Form C||For partial withdrawals from the PPF account|
|Form D||To apply for a loan against the PPF account|
|Form E||Adding a nominee for the PPF account|
|Form F||Changing the nomination for the PPF account|
|Form G||For the claiming of funds in a PPF account by a nominee or the legal heir|
|Form H||For extending the maturity of the PPF account (1 or 5 years)|
Loan Facility on PPF Account
- The loan facility is available on regular PPF accounts.
- The loan facility is not available on discontinued PPF accounts till they are regularised.
- You can get loan any time after 1 year but before 5 years of initial subscription.
- You can get loan on PPF account upto 25% of the balance.
- You should repay the loan in full to get a fresh loan.
- You are entitled to one loan in a year on your PPF account.
- The partial withdrawal facility is available on regular PPF account.
- The partial withdrawal facility is not available on discontinued PPF account till they are regularised.
- You can withdraw any time after the expiry of 5 years from the end of the year in which the account was opened.
- You can withdraw only once in a year.
- The withdrawal allowed of amount not exceeding 50% of the amount that stood to his credit at the end of the 4th year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower.
The premature closure of PPF account is allowed in the following conditions.
- On the death of account holder.
- Treatment of life threatening disease of the account holder, his spouse or dependent children or parents.
- Higher education of the account holder, or depended children.
- On the change in residency status of the account holder.
Such premature closure will not be allowed before the expiry of 5 years from the end of the year in which the account was opened.
The interest will be lower by 1% than the rate at which interest has been credit in the account from time to time.
How to Close PPF Account at Maturity?
- You can close the PPF account after the expiry of 15 years from the end of the year in which the account was opening. You can close the PPF account after applying in Form-3.
- You can withdrawal the entire balance along with interest up to the last day of the month preceding the month in which the account is closed.
Tips to Extend Return and Tax Benefits
- Make your contributions on or before the 5th of every month (if contributing monthly) or 5th of the month in which contribution is made (if contributing lump sum).
- Extend PPF account after maturity with deposits for block periods of 5 years and make withdrawals in block period to the extent of 6096 of credit balance at the commencement of the block period to meet your needs…it may be one single lump sum withdrawal in block period or one withdrawal per year. Such withdrawal is totally tax-free under section 10(11) of the Income-tax Act
- Withdrawals in an extended period may be used to fund the tax-saving deposit into PPF upto Rs. 1,50,000 to avail benefits under section 80C while earning totally tax-free interest. Senior citizens can avail this option as it is very attractive option to meet their needs for regular yearly income and also meet their section 80C needs.