Public Provident Fund (PPF) All You Wanted to Know *UptoDate*

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.,

Public Provident Fund Scheme

Changes Made w.e.f. 12-12-2019

ParticularsOld SchemeNew Scheme w.e.f 12-12-2019
Initial Minimum AmountRs.100Rs.500
Limit of Deposit Numbers12No Limit
Interest RatePlease See Table BelowPlease See Table Below
Interest Rate on Loan Taken2% pa1% pa

New PPF Scheme Quick Briefs

Here are the salient features of Public Provident Fund Saving Scheme.

Maturity Period15 Years
Deposit Time Frame15 Years
Tax Benefits on InterestYes Available, Interest is Tax Free
Tax Benefits on DepositsDeduction 80C available
Who Can Open PPF AccountAny Resident Individual
Joint Account AvailabilityNo
Number of Accounts AllowedOnly One
Minimum deposits in an account in a F.Y.Rs.500
Any Default While Making Minimum DepositsDiscontinued Account
Penalty for Revival Discontinued AccountFee of Rs.50 per year with minimum payment of Rs.500 per year
Max Deposit in a YearRs.1,50,000
Interest Rate7.1% per annum (April 2020 to June 2020) 7.9% per annum (Interest rate can change from time to time after account is opened)
Partial WithdrawalAllowed
Premature Closure of AccountAllowed on certain conditions

Interest Rates

PeriodInterest Rate
April 1986 – January 200012.0%
January 2000 – February 200111.0%
March 2001 – February 20029.5%
March 2002 – February 20039.0%
March 2003 – November 20118.0%
December 2011 – March 20128.6%
April 2012 – March 20138.8%
April 2013 – March 20168.7%
April 2016 – September 20168.1%
October 2016 –  March 20178.0%
April 2017 – June 20177.9%
July 2017 – December 20177.8%
January 2018 – September 20187.6%
October 2018 – March 20198.0%
April 2019 – June 20198.0%
July 2019 on wards7.9%
April 2020 to June 20207.1%

Maturity Period

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.

Tax Benefits

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.

Payment Mode

  • 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.

Interest Rates

  • 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 All Forms Related to PPF Account

List of FormsNature of the Form
Form AFor opening a Public Provident Fund account
Form BFor making deposits in the PPF account and repaying the loans against the PPF account
Form CFor partial withdrawals from the PPF account
Form DTo apply for a loan against the PPF account
Form EAdding a nominee for the PPF account
Form FChanging the nomination for the PPF account
Form GFor the claiming of funds in  a PPF account by a nominee or the legal heir
Form HFor 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.

Partial Withdrawal

  • 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.

Premature Closure

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.

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