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 693 branches of PNB. The salient features of the Scheme are as under:-
To see a detailed list of these branches CLICK HERE
Click Here Procedure 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.
Every individual desirous of subscribing to Fund under the Scheme for the first time either on his own or on behalf of a minor of whom he is the guardian shall apply to the Accounts Office in Form A form, together with the amount of initial subscription which shall be minimum of Rs.100/-.
Minimum remittance of Rs.500/- and maximum of Rs.1,50,000/- in multiples of Rs.5/- can be made in lumpsum or in 12 installments per year.
(The subscription limits stands enhanced to Rs. 1,50,000/ per year w.e.f. 23.08.2014)
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 maturity.
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 hardship.
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 Rs.500/- p.a.
Nomination facility is available.
Documents should be self-attested.