PUBLIC PROVIDENT FUND - OPENING OF ACCOUNT
Eligibility:
(i) An individual
(ii) An individual may also open one account on behalf of each minor or a person of unsound mind of whom he is the guardian:
Provided that only one account shall be opened in the name of a minor or a person of unsound mind by any of the guardian.
(iii) Joint account shall not be opened under this Scheme.
(iv) Only one account can be opened in one name either in the Post Office or in the authorised bank.
Note: Those having General Provident Fund or Employees Provident Fund can also open a
Public Provident Fund account.
Subscriptions:
(i) The account shall be opened with a minimum initial deposit of five hundred rupees and thereafter deposit of any sum in multiples of fifty rupees shall be made.
(ii) A deposit which shall not be less than five hundred rupees and not more than one lakh fifty thousand rupees in multiple of fifty rupees may be made in an account in a financial year.
(iii) Maximum limit of one lakh fifty thousand rupees as specified in sub-paragraph (2) by an individual shall be inclusive of the deposits made in his/her own account and in the account opened on behalf of the minor.
(iv) The subscriptions can be deposited in lump sum or in instalments subject to the maximum limit on the amount of subscription. There is no restrictions on the number of subscriptions in a financial year in PPF account w.e.f. 18.12.2019.
The subscriptions in cash and by cheque/demand draft will be accepted through the pay-in-slip (SB-103) along with the Passbook in case of deposit by cash as in the savings accounts.
If the deposit is made by cheque or Demand draft, the date of realization of instrument will be treated as the date of deposit.
Condonation of default in payment of subscriptions
With effect from 1.4.1983 as per amended paragraph 7(2) of the PPF Scheme 1968 & paragraph 6(2) of PPF Scheme 2019, the Account Office has been authorized to condone the default in payment of subscription, by charging a fee of Rs. 50/- along with arrears of subscription of Rs. 500/- for each year of default.
Interest:
(i) Interest at the rate fixed by the government from time to time shall be eligible for a calendar month on the lowest balance at the credit of an account between the close of the fifth day and the end of the month.
(ii) Interest shall be credited to the account at the end of each year.
(iii) Interest shall be credited at the end of the year irrespective of the change of the office where the account stands due to transfer of the account during the year.
For details, Rule 117 to 122 of CBS Manual may be referred.
Income Tax:
Subscription to Public Provident Fund qualify for deduction from the taxable income of the subscriber for income tax purposes under section 80C of IT Act.
The interest credited to the fund is totally exempt from income tax. The amount standing to the credit of the subscriber in the fund is totally exempt from wealth tax.
Amount standing to the credit of any 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 except for the purpose of income tax recovery / recovery under PMLA Act.
As per SB order No. 18/2020, PPF accounts can be opened at single handed SOs also. As per SB order No. 27/2020 and 32/2020, GDS branch offices are also authorised to open or accept deposits through cheque or SB withdrawal application.
Click here for SB Order No. 18/2020, , SB Order No. 27/2020 and SB Order No. 32/2020
Amendment:
Vide SB Order No. 14/2020, facility for opening of PPF accounts through POSB Netbanking has been introduced. Accounts can be opened in the name of Netbanking user only. The option is available under General Services tab. Nominee will be the same as registered in the linked SB account
Click here for SB Order No. 14/2022
Regularisation of accounts opened in contravention of rules:
PPF account opened under the name of a minor:
(a). POSA interest shall be paid tor such irregular accounts until the individual (minor) becomes eligible for opening of account, that is, the individual attains 18 years of age. Thereafter, the applicable interest rate will be paid.
(b). Maturity period for such accounts will be calculated from the date the minor becomes an adult, that is, the date from which the individual becomes eligible to open the account.
More than one PPF Account:
(a). The primary account shall earn the scheme rale of interest subject to the deposit being within the ceiling applicable for each year. (Primary Account is one of the two accounts chosen by the investor in any Post Office/ agency bank where the investor prefers to continue with the account upon regularisation).
(b). The balance amount in the second account shall be merged with the first account subject to the primary account remaining within the applicable investment ceiling in each year. Post-merger, the primary account will continue to enjoy the prevailing scheme rate of interest. Excess balance in the second account, if any, shall be refunded with Zero percent rate of interest.
(c). Any additional accounts beyond the primary and second account, shall earn zero percent rate of interest from the date of opening of that account.
Extension of PPF account by NRI:
For only those active NRI's PPF accounts opened under the Public Provident Fund Scheme (PPF), 1968, where Form H did not specifically ask the residency status of the account holder, POSA rate of interest shall be given to the account holder (Indian citizen who became NRI during the currency of Account) till 30th September 2024.Ihereafter, the said account shall earn zero percent rate of interest.
Click here for SB Order NO. 5/2024
