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Government Notifies New PPF Rules: Here's All You Need To Know


The government has come up with new public provident fund rules (PPF) and these become applicable with immediate effect replacing all other earlier rules. "In exercise of the powers conferred by section 3A of the Government Savings Promotion Act, 1873 (5 of 1873), the Central Government hereby rescinds with immediate effect the Public Provident Fund Scheme, 1968, published vide number G.S.R. 1136(E), dated the 15th June, 1968, except as respects things done and omitted to be done before such rescission," said a gazette notification issued by the government.

Government Notifies New PPF Rules: Here's All You Need To Know

Salient features of Public Provident Fund Scheme, 2019

Number of PPF account that can be maintained by an individual: Public provident fund account can be opened by filling form 1. A person can also open one account on behalf of each of the minor child or a person of unsound mind of whom he or she happens to be the guardian. PPF account cannot be held in joint names.

Deposit limit in the account: A minimum of Rs. 500 and a maximum of Rs. 1.5 lakh can be deposited in PPF account in a financial year. And this Rs. 1.5 lakh cap stands applicable as a whole i.e. amount deposited in the subscriber's account and the one maintained on behalf of a minor child or person of unsound mind of whom he is the guardian.

Discontinued PPF account: In accordance with the notification, in respect of the PPF account opened with a minimum deposit of Rs. 500 in the first year, subscriber in the following years fails to deposit the minimum amount, the account shall be considered as discontinued.

Calculation of PPF interest: Interest amount will be credited to the PPF account holder's account at the end of each year. And will be calculated basis the applicable rate of interest (currently at 7.9% per annum for the October-December quarter), on the lowest balance to the credit of the account between the close of the fifth day and the end of the month. Furthermore, even in a case when you have transferred your PPF account elsewhere and because of it account office gets changed, herein also interest will be credited at the end of the year.


Revival of PPF account: For revival of a discontinued PPF account during the maturity period, you will be required to pay Rs. 50 together with arrears of Rs. 500 towards minimum deposit amount for each year of default. Any balance in the discontinued PPF account not revived by the subscriber before the maturity of the account will continue to reap interest benefit at the rate applicable from time to time.

Also, the accountholder of such a discontinued PPF account will not be able to open a new account before closing the same account after it matures.

PPF withdrawal from account: Following the end of 5 years period from the end of the year in which the PPF account was opened, PPF account holder is allowed to make withdrawals from the account. The application form for the same is Form 2 and an amount not over 50% of the amount to the credit in his or her account 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 be withdrawn.

Protection of PPF balance from attachment: PPF account balance cannot be attached under circumstances of any order or decree of court against an individual's debt or any other liability.

Extension of PPF account after maturity: Under paragraph 4, a PPF accountholder after the account matures i.e. after the end of 15 years term from the end of the year in which the account was opened, is allowed to extend and deposit amount for a block of further 5 years. For the same you need to apply in form 4 to the accounts office.

Read more about: ppf public provident fund
Story first published: Tuesday, December 17, 2019, 10:56 [IST]
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