New Delhi3 days ago
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The new rules of Public Provident Fund i.e. PPF are going to be implemented from October 1. Last month, the Department of Economic Affairs of the Finance Ministry had issued new guidelines to streamline the existing Public Provident Accounts opened through post offices.
The new changes in PPF rules are related to PPF accounts opened in the name of minors, more than one PPF accounts and extension of PPF accounts of Non-Resident Indians (NRIs) under National Savings Schemes through post offices.
Rules changed for PPF accounts
PPF accounts opened in the name of miners
- According to the revised rules for PPF accounts opened in the name of minors, the minor will continue to receive Post Office Savings Account (POSA) interest on these accounts till the age of 18 years.
- The maturity period of such accounts will be calculated from the date the minor becomes an adult. That is, the date from which the person becomes eligible to open an account.
Multiple PPF accounts
- Interest will be given as per the scheme rate on the primary account of the investor in any post office or agency bank. However, the condition is that the deposit amount should not exceed the annual ceiling limit.
- If there is a balance in the second account, it will be linked with the primary account, provided the total amount remains within the annual investment limit.
- After linking both the accounts, the interest rate of the existing scheme will remain applicable on the primary account. Any surplus funds in the second account will be reimbursed at 0% interest rate.
0% interest rate on additional account
- Any additional account other than primary and secondary account will get 0% interest rate from the date of account opening.
PPF accounts of NRIs
- For NRIs with active PPF accounts opened under the Public Provident Fund Scheme of 1968, Form H did not inquire about the residency status of the account holder.
- Therefore, the interest rate applicable on these accounts will remain as per POSA guidelines till September 30, 2024. After this, interest at 0% rate will start earning on the accounts.
PPF is a popular financial instrument Public Provident Fund (PPF) is a popular financial instrument supported by the central government, designed to encourage saving and investment while providing attractive long-term returns to investors.
It works under the EEE (Exempt-Exempt-Exempt) category. This ensures that the principal invested, interest earned and the final maturity amount – all are free from taxation as per the provisions given in the Income Tax Act 1961.