Covid 19 Impact: PPF Extension Rules Relaxed

The government, considering the hardship countrymen are facing amid the Covid 19 pandemic, has relaxed rules for extension of PPF account.

PPF A/c Extension Allowed Till July, 31

As part of the relaxation, public provident fund investors who wish to extend their account beyond the original maturity term of 15 years and for whom the deadline to submit the form is in lockdown with one-year grace period after maturity -can submit the extension form via registered e-mail id until July 31, as per the postal department.

And once the lockdown is completely done away with, original PPF extension form can be submitted to the respective operating agency.

How To Get PPF Account Extended And Other Details?

PPF is a long term retirement savings product and currently earns 7.1% per annum with interest rate remaining unchanged for the July-September quarter of FY21. In a usual case, the maturity term of PPF is 15 years but as per the investor's discretion can be extended further in blocks of 5 years.

With or Without Contribution Option In PPF Account After Maturity

Also, there is an option of maintaining the PPF account post-maturity either in contribution or non-contribution mode. But what is interesting is even with no fresh investment post the regular maturity cycle, the account until its closure will continue to fetch interest rate return.

And if you wish to continue the account in contribution mode post 15 years maturity, you are required to submit form H within a period of one-year from the account's maturity date as without its submission you will be at an disadvantage for 2 reasons:

1. Any fresh investment into the account post its 15 year term without form H would not earn interest income.

2. Also, these fresh contributions without the mandate shall not be eligible for claiming tax deduction under section 80C (with a upper limit cap of Rs. 1.5 lakh in a year)

In a case when the PPF account holder post the maturity term do not submit the form or close the account then in such a case no fresh investment into the account will be allowed. But balance remaining in the account will continue to fetch some return.

Also, there have been relaxations in respect of other small savings schemes which can be read here.

Moreover, for the FY2019-20, the government has allowed time until July 31 to make investments or payments for claiming deduction under Section 80C, 80D and 80G for FY 2019-20 and any amount in excess of the threshold can be carried forward for the next financial year.

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