PPF Scheme 2019: An Overview

The Union government has notified new Public Provident Fund (PPF) rules. Named Public Provident Fund Scheme 2019, the new rules have replaced all previous PPF rules with immediate effect.

In this regard, the following points are noteworthy:-

(i) Opening of PPF Account :-

(a) An individual can open an account by making an application in Form-1, along with the relevant documents and a minimum deposit of ₹500.

(b) An individual can also open one account on behalf of each minor or a person of unsound mind of whom he is the guardian.

(c) Only one account shall be opened in the name of a minor or a person of unsound mind by any of the guardian.

(d) No joint PPF account is allowed.

(ii) Withdrawal from Account :-

(a) PPF withdrawal from account will be allowed any time after the expiry of five years from the end of the year in which the account was opened.

(b) The account holder may, avail withdrawal of an amount not exceeding 50 per cent of the amount that stood to his credit at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower.

(iii) Extension of Account :-

The account holder on the expiry of fifteen years from the end of the year in which the account was opened, may extend his account and continue to make deposits for a further block period of five years.

(iv) Provision for Attachment :-

Under the new rules, the amount in PPF account will 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.

(v) PPF Deposit limit :-

(a) The PPF deposit limit is not less than ₹ 500 and not more than ₹ 1.5 lakhs in a financial year.

(b) The maximum deposit limit is inclusive of the deposits made in the subscriber’s own account and in the account opened on behalf of the minor.

(vi) Discontinued PPF account :-

As per the notification, any account in which the account holder, having deposited five hundred rupees in the initial year, fails to deposit the minimum amount in the following years, shall be treated as discontinued.

(vii) PPF Account Revival :-

(a) Discontinued account can be revived during the maturity period by paying ₹ 50 along with arrears of minimum deposit of ₹500 for each year of default.

(b) The balance in a discontinued account not revived by the account holder before its maturity will continue to earn interest at the rate applicable to the Scheme from time to time.

(c) The account holder of a discontinued account will not be eligible to open a new account before closure of such discontinued account after maturity.

(viii) PPF Interest Calculation :-

(a) Interest is to be credited to the account at the end of each year.

(b) The applicable interest rate (7.9% per annum at present) will 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.

(c) Interest will be credited at the end of the year irrespective of the change of the account office due to transfer of the account during the year.

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