The new rules of the Public Provident Fund, namely the PPF, will be implemented from October 1. Last month, the Department of Economic Affairs of the Ministry of Finance issued new guidelines aimed at streamlining existing public provident accounts opened through post offices.
The new changes in PPF rules relate to PPF accounts opened in the name of minors, more than one PPF account and extension of PPF accounts of Non-Resident Indians (NRIs) under National Savings Schemes through Bureaus of post.
Changed rules for PPF accounts
PPF accounts opened in the name of minors
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 such accounts till the age of 18 years. The maturity period of these accounts will be calculated from. the date the minor reaches the age of majority will be from. That is to say 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 investor’s main account at any post office or agency bank. However, the condition is that the deposit amount does not exceed the annual ceiling. If there is a balance on the second account, it will be merged with the main account, provided the total amount remains within the annual investment limit. accounts After the linkage, the interest rate of the existing scheme will remain applicable on the main account. Any excess funds in the second account will be refunded at a 0% interest rate.
0% interest rate on the additional account
Any additional accounts other than the primary and secondary accounts will enjoy a 0% interest rate from the date the account is opened.
PPF accounts of NRIs
For NRIs having active PPF accounts opened under the Public Provident Fund Scheme, 1968, where Form H did not inquire about the residence status of the account holder, the interest rates applicable on such accounts will be as per the POSA guidelines until September 30, 2024. Will be as per. After that, interest at the rate of 0% will start to be earned on the accounts.
PPF is a popular financial instrument The Public Provident Fund (PPF) is a popular financial instrument supported by the central government, designed to encourage savings and investment while providing attractive long-term returns to investors.
It operates in the EEE (Exempt-Exempt-Exempt) category. This ensures that the principal invested, the interest earned and the final maturity amount – all are exempt from tax as per the provisions of the Income Tax Act, 1961.