The earlier notification which required an individual maintaining a PPF account in India to close the account upon change in residential status to a non-resident has been temporarily dismissed. With this the earlier notification released in respect of NRI's PPF account has been put in abeyance.
The office memo concerning this premise has been released by the Department of Economic Affairs on February 23, 2018.
Few PPF rules you should know
PPF is a retirement product with a 15-year maturity time which can be extended in blocks of 5 years indefinitiely. The provision is not available for investors who turn non-resident during the course of the scheme.
And as against the earlier notification as per which the PPF account held by the NRI account was deemed to be closed from the date of change of residential status to non-resident and earn an interest rate at par with post office savings account can now be continued.
PPF investment cannot be made by an NRI citizen.
As part of the Finance Bill, 2018, a provision has been made to amend the The Public Provident Fund Act, 1968 and to make it the part of Government Savings Banks Act, 1873.
It has been suggested to allow pre-closure of PPF account due to some of the exigencies including healthcare or higher education needs.
The returns on the PPF are tied to the g-securities yield and are reported on a quarterly basis and for the January-March 2018 quarter, the instrument earns 7.6% return.