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Home Income Tax Tax Saving Schemes Public Provident Fund Scheme 2019 – Government Saving Scheme

Public Provident Fund Scheme 2019 – Government Saving Scheme

All about PPF Scheme 2019

Ministry of Finance (Department of Economic Affairs) vide their E-Gazette Notification dated 12th December 2019, G.S.R. 915(E), Central Government while exercising their power as stated in section 3A of the Government Savings Promotion Act, 1873, has notified a scheme called the “Public Provident Fund Scheme 2019”.

Related: Sukanya Samriddhi Account Scheme – Government Tax Saving Scheme

Key features of the “Public Provident Fund Scheme 2019” are as follows:

Limits of number of accountsAn individual may open an account by making an application in
Form – 1 [Application for opening an account]
Can a guardian open account in the name of minorYes, a guardian can open only one account in the name of a minor or a person of unsound mind.
Minimum subscription during the financial yearRs.500/-
Maximum subscription during the financial yearRs.1,50,000/-
Maximum Tenure15 years
Limit of Rs.1,50,000/- includesSum of all subscriptions by the individual including the sum deposited in the account of the minor or any deposit is being made on account of default in any preceding year but excluding the default fee.
Account will be considered as discontinued ifThe individual fails to deposit the minimum subscription amount in the year following the initial year.
Condition to revive the discontinued account (during the maturity)Pay an amount equal to Rs.50/- plus a minimum subscription amount of Rs.500/- for each year of default.
Will the balance in a discontinued account will earn interest?Yes, It the discontinued account is not revived by the individual, the balance in the said account will continue to earn interest at the rate applicable to the scheme from time to time.
In case of a discontinued account, can an individual open another account?No, an individual shall not be eligible to open a new account before the closure of such an account after maturity.
Can an individual take loan on discontinued account?No, an individual is prohibited to take the loan against such an account.
Can an Individual withdraw partially from discontinued account?No, an individual is not eligible to withdraw any amount till the said account is finally closed by the individual.
Is loan or partial withdrawal allowed from normal account?Yes, only as per the provisions of this scheme.
Interest rate7.1%
Interest calculationOn the lowest balance between the close of the 5th day to the last day of the calendar month.
Interest credited onThe last day of each year.
Loan facilityAt any time after the expiry of 1 year from the end of the year in which the initial subscription was made but before the expiry of 5 years from the end of the year in which the initial subscription was made.
Form for obtaining loanForm – 2 [Application for loan/ withdrawal]
Maximum amount that can be applied for loan?Maximum of 25% of the balance credited in the account at the end of the 2nd year immediately preceding the year in which the loan is applied for.
Is account of a minor or a person of unsound mind eligible for loan?Yes, for the benefit of such a minor or a person of unsound mind by submitting the requisite documents.
Repayment of loan and interestRepayment before the expiry of 36 months from the 1st day of the month following the month in which the loan is sanctioned.
Repayment in case of death of the account holder?Nominee or legal heir shall be liable to pay interest on the loan availed by the account holder but not repaid before his death. Such an amount of due interest shall be adjusted at the time of the final closure of the account.
WithdrawalIn Form – 2, any time after the expiry of 5 years from the end of the year in which the said account was opened.
Maximum withdrawal amount25% of the balance at the end of the 4th year immediately preceding the year of withdrawal; or At the end of the preceding year, whichever is lower.  
Can withdrawal be made, if existing loan is there?No, outstanding loan along with interest is to be paid off before availing of the withdrawal facility.
Closure of accountAny time after the expiry of 15 years from the end of the year in which the account was opened.
Form for Closure of accountForm – 3 [Application for closure of account]
Maturity amount/ closure amountOn maturity or closure after maturity, closing balance in the said account along with the interest due till the last day of the month preceding the month in which the account is closed.
Can an individual continue the account after the maturity?Yes, individuals can continue with this account without making any further deposits for any number of years.
Interest under the above said conditionIndividuals will continue to earn interest under the said account as applicable to the scheme from time to time.
Withdrawal after continuing the account after maturity?Yes, an individual is eligible to withdraw any amount within the credit balance once a year.
Condition after continuing the said accountOnce the account is in operation after the maturity period for more than 1 year, the account holder shall not have the option to continue the account with deposits.
Further extension of account with deposits after maturityIn a block of 5 years
Form for further extensionForm – 4 [Application for extension of account]
Is there any time limit to apply for further extension with deposits?Yes, an individual can apply for a further extension before the expiry of 1 year from the maturity of the account.
What if the individual has not exercised this option well in time?No further deposits will be allowed in the account if the account holder fails to give his option to continue the account within 1 year from the date of maturity. Any deposit made in such an account shall be treated as irregular and will be refunded to the individual without any interest.
Partial withdrawalMaximum of 60% of the balance at the commencement of the 5-year block period.
Premature closure on fulfilling certain conditions(a) On account of the treatment of life-threatening disease of the account holder, his spouse or dependent children or parents (b) on account of higher education of the account holder, or dependent children. (c) change in the residency status of the account holder
Form – 5Application for premature closure of account.
Closure on account of death.The nominee or the legal heir shall not be allowed to continue the account. The balance will be paid to the nominee or the legal heir with interest.
Protection of credit balance from attachmentCredit balance in the said account of the account holder shall not be liable to attachment under any order or decree of any court in respect of any debt or liability incurred by the account holder.
Income Tax BenefitsEligible for Section 80C deduction

Forms for Public Provident Fund Account (PPF)

Public Provident Fund Rules 2019

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