Public Provident Fund Scheme (PPF)
Public Provident Fund Scheme was
introduced by Government of India on 01.07.1968 and it provides the depositor
the twin benefits of attractive return and tax benefit. The Scheme is
operational in select branches of PNB. The salient features of the Scheme are
as under :
To see a detailed list of these branches CLICK
to open PPF Account
a. Individual or individual as guardian of a minor can open the
account. (can not be opened in Joint names).
b. HUF are not eligible.
c. Non Resident Indians are not eligible to open the account.
d. Only one account can be opened by an individual in one name.
Minimum remittance of Rs.500/-
and maximum of Rs.1,00,000/- in multiples of Rs.5/- an be made in lumpsum or in
12 installments per year.
(The subscription limits stands enhanced to Rs. 1,00,000/ per year
The account is of 15 years
duration and the account can be continued for one or more blocks of 5 years
without loss of interest on written request within 1 year from the date of
Interest at the rate of 8.70%
p.a. w.e.f 01.04.2013 is credited to the
account on 31st March of every year on the minimum balance between 5th day and
end of the month. The rate of interest
is notified by Ministry of Finance every year.
Loans and Withdrawals:
The depositor is eligible for a
loan. The first loan can be taken in the third financial year from the
financial year in which the account was opened up to 25% of the amount at the
credit at the end of first financial year. Loan is repayable in 36 months.
w.e.f 01.12.2011, Interest is payable on the loan at 2% per annum of the
principal. The repayment of loan may be
made either in one lump sum or in two or more monthly installments within the
prescribed period of thirty six months.
The repayment is credited to the subscriber’s account. After the principal of the loan is fully
repaid, the subscriber shall pay interest thereon in not more
than two monthly installments at the rate of two per cent per annum of the
principal. If the loan is not repaid
within the prescribed period of thirty six months, interest on the amount of
loan outstanding shall be charged at six per cent per annum instead of at
two per cent per annum.
Withdrawal is allowed every year from the end of the 5th year. The amount
is limited to 50% of the balance at credit, at the end of 4th year immediately
preceding the year in which the amount is withdrawn or at the end of the
preceding year whichever is lower less the amount of loan if any drawn by him
which remains unpaid.
If the account is continued after
maturity, a partial withdrawal up to 60% of the balance of credit at the
commencement of the extended period is permitted.
Transfer of a/c:
The account is transferable to
and from permitted branches of Nationalised or Private sector Banks or
Post Offices on the request of PPF A/c Holder.
Premature Closure of PPF A/c
Premature closure of the account
after completion of 5 years from the end of the year in which the account was
opened could be considered by the Ministry of Finance on genuine grounds of
The subscriptions to the account
qualify for deduction under Section 80 C of IT Act. The interest credited
to the account is totally exempt from Income Tax. The amount standing to
the credit of the account is fully exempted from Wealth Tax.
Discontinued account can be
revived on payment of Rs.50/- per year along with arrears of subscription of
Nomination facility is available.
Documents should be self-attested.
Once the account is opened, a PPF
Account passbook is issued to you. All transactions on your PPF
Account are updated in this passbook; the passbook is required for claiming tax
deduction under Section 80C of IT Act.