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Who can open a Public Provident Funds account:
Home » Income Tax Solution » Tax Savings Scheme » Post Office Schemes » Public Provident Funds [PPF ]
An individual :
in his own name,
on behalf of a minor of whom he is a guardian,
a Hindu Undivided Family.
Where to open a PPF account
at designated post offices throughout the country and
at designated branches of Public Sector Banks throughout the country.
Maturity period
• The account matures for closure after 15 years.
Account can be continued with or without subscriptions after maturity for block periods of five years.
Nomination
Nomination facility is available under Public Provident Funds accounts.
Deposit limits
Minimum deposit required is Rs. 500 in a financial year.
Maximum deposit limit is Rs. 70,000 in a financial year.
Maximum number of deposits is twelve in a financial year.
Loans against Public Provident Fund Account
Loans from the amount at credit in PPF account can be taken after completion of one year from the end of the financial year of opening of the account and before completion of the 5th year. The amount of withdrawal cannot exceed 40% of the amount that stood to credit at the end of fourth year preceding the year of withdrawal or at the end of preceding year whichever is lower.
Withdrawal
Premature withdrawal is permissible every year after completion of 5 years from the end of the year of opening the account.
Premature encashment of NSC:
Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law.
Transferability
Account can be transferred from one post office to another post office,
from a bank to another bank; and
from a bank to post office and vice-versa.
PPF Pass Book
Income Tax rebate is available on the amount invested and interest accruing every year under Section 88 of Income tax Act, as amended from time to time. [under Sec 80C]
Income tax relief is also available on the interest earned as per limits fixed vied section 80L of Income Tax, as amended from time to time.
 
Interest
Interest at the rate, notified by the Central Government from time to time, is calculated and credited to the accounts at the end of each financial year.
Present rate of interest is eight per cent / per year since: 1st March, 2003.
Income Tax relief for Public Provident Fund account holders
Income Tax rebate is available ‘on the deposits made’, under Section 88 of Income tax Act, as amended from time to time.
Interest credited every year is tax-free.
 
National Savings Certificate (NSC) Public Provident Fund (PPF)
Interest Paid: 8%, compounded half-yearly Interest Paid: 8%, compounded annually
No monthly/yearly payments No monthly/yearly payments
Minimum investment: Rs 100 Maximum investment: No Limit Minimum investment: Rs 500 (required annually) Maximum investment: Rs 70,000
Tenure: 6 years Tenure: 15 years
Tax benefit under Income tax available. Amount invested or Rs 1,00,000 which ever is lower Tax benefit under Income tax available. Amount invested or Rs 70,000 which ever is lower
Good investment for medium-term option Good investment for medium-term option
 
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