Rish s
Quick Summary
Deposits
- Individual can open, Cannot be held jointly. Nomination allowed.
- Individual can open on behalf of minor / individual with unsound mind also
- In case of Minor, adult has to be the guardian.
- Minimum tenure of 15 years. Can be extended in blocks of 5 years.
- Current interest rate is 7.1%
- invest a minimum of Rs. 500 (compulsory minimum every year) and a maximum of Rs. 1,50,000 in a financial year.
- (Max aggregate 1,50,000 for self and minor included)
Partial Withdrawal
- Anytime after expiry of 5 year (from end of year in which 1st subscription was made).
- Max 50% partial withdrawal (of balance outstanding at end of 4th year immediately preceding the year of withdrawal or at end of preceding year, whichever is lower).
Premature Closure
- Allowed after expiry of 5 year (from end of year in which 1st subscription was made).
- Life threatening disease, higher studies, change of residential status (self or dependents)
- Interest at 1% lower
Closure
- Anytime after expiry of 15 year (from end of year in which 1st subscription was made).
Continue account (with deposits)
- Option to continue (by making further deposits) has to be exercised within 1 year of maturity. (ie. If account is continued beyond 1 year after maturity, without deposits, then no option to continue with deposits.)
- Extension will be for a block period of 5 years (renewable after every 5 years again)
- Partial withdrawal during this block period is max 60% (of amount o/s at start of block period)
Continue account (without deposits)
- Account can be continued after maturity without further deposits.
- Interest will continue at PPF applicable rates.
- Allowed one withdrawal per year, of any amount.
Closure on death of account holder
- Immediate payout to nominee or legal heir.
- Continuation cannot be allowed
Protection of PPF balance
- Amount of PPF balance cannot be attached under any order or decree of any court.
Income Tax Exemptions
- PPF tax exempt under section 80C of the Income Tax Act
- Interest on PPF also not taxable under 10(11) of the Income Tax Act
Loan
- After expiry of 1 year (from end of year in which 1st subscription was made) but before 5 years (from end of year in which 1st subscription was made).
- Max loan 25% of balance outstanding (at end of 2nd year immediately preceding the year in which loan is applied.)
- New loan cannot be applied until old loan is repaid.
- Only 1 loan in one year.
- Principal Repayable in 36 months
- Interest repayable in 2 months after full payment of principal – Interest rate 1% per annum
- If loan not repaid completely in 36 months (or only partly paid) then interest rate is 6% per annum from beginning till full repayment.
FAQ :
You must invest a minimum of Rs. 500 annually, with a maximum limit of Rs. 1,50,000 in a financial year, which includes contributions for both yourself and any minor accounts.
Partial withdrawals are allowed anytime after 5 years from the end of the year in which your first subscription was made. The maximum withdrawal is 50% of the balance outstanding at the end of the fourth year preceding the withdrawal year.
Yes, premature closure is permitted after 5 years from the end of the year of your first subscription, in cases of life-threatening diseases, higher education, or change in residential status for yourself or dependents. The interest rate will be reduced by 1% in such cases.
PPF investments are tax-exempt under Section 80C of the Income Tax Act, and the interest earned on PPF is also not taxable under Section 10(11).
You have the option to continue your PPF account by making further deposits within one year of maturity. Extensions are granted in blocks of 5 years, and you can withdraw up to 60% of the balance during this extended period.
A loan can be taken after one year but before five years from the end of the year in which your first subscription was made. The maximum loan amount is 25% of the balance outstanding at the end of the second year preceding the loan application.
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