Jan 25, 2010

PPF: FAQs

Photo by Valerie Everett
I’ve already covered Pubic Provident Fund (PPF) in my earlier write ups. But there are still certain operational issues left unanswered. So this post is going to be your guide to PPF investing by answering almost every possible question about PPF. Here’s the list of commonly asked questions (FAQs) about PPF:
PPF Investing

Q-1: How much interest do I earn by investing in PPF scheme?
Ans: Since the year 2003-04, the rate of interest on PPF saving scheme is 8% p.a. (8.6% w.e.f. 1st Dec 2011)compounded annually.

Q-2: How does PPF stand vis-à-vis NSC?
Ans: Investing in PPF certainly scores over investing in NSC. For more details see: Which is better between the PPF and the NSC?

Q-3: How can I make the most of my PPF account? What are the considerations to be kept in mind while investing in PPF?
Ans: There are certain tips and tricks you can use to make the most of your PPF account such as opening PPF account at the earliest, investing on regular basis rather than waiting till the end of the year, and investing before 5th of every month. For more of such tips see: 10 Practical Tips for investing in PPF.

Q-4: How do I calculate the interest on PPF?
Ans: Use PPF interest Calculator to calculate your PPF interest and maturity value.

Q-5: Why should I invest in PPF?
Ans: You must invest in a PPF because
it is the best debt option after PF:

1. 8% p.a.(8.6% w.e.f 1st Dec 2011) tax-free returns in addition to section 80C deduction on deposits.

2. Option to invest regularly for long term and can be continued indefinitely even after maturity

3. Highest safety as it is a government- backed saving scheme.

4. Can’t be attached by any court.

5. Flexibility to invest varying amounts. You’re allowed to deposit in lump sum or in installments. Further, you can vary amount of installments as per your convenience and it is not necessary to deposit every month.


Making Contributions in PPF Account

Q-6: What is the maximum ceiling on deposit in PPF?
Ans: As per Section 80C of Income Tax --> Rs 1 lakh
As per PPF Rules --> Rs 70,000 (Rs 1 lakh w.e.f. Dec’11)

Q-7: How many numbers of times can I make deposits in PPF account during a year?
Ans: You can deposit money in your PPF account either in lump sum or in installments which need not be of same amount. However, total number of deposits during a financial year can’t exceed twelve.

Q-8: Am I required to deposit money in my PPF account every year? What if I don’t?
Ans: Yes, a minimum deposit of Rs 500 is required every year. If you don’t, then your account will become inoperative.


PPF: Tax Benefits

Q-9: What are the tax benefits available on PPF scheme?
Ans: There are two benefits: first when you deposit money in your PPF account, you get entitled for tax deduction u/s 80C and as a result your taxable income stands reduced to that extent. The second tax benefit is that the interest earned on your PPF deposits is completely exempt from tax.

Q-10: Is it possible to avail Rs 1 lakh deduction under section 80C though we’re allowed to deposit maximum of Rs 70,000 (Rs 1 lakh w.e.f. Dec 2011)under PPF rules?
Ans: Actually under the IT Act, there is no limit and even under PPF rules Rs 70,000 (Rs 1 lakh w.e.f. Dec 2011)limit is meant for self a/c and minor a/c. It doesn’t include the contribution to the a/c of spouse and major children.

In other words, as per PPF rules, the total deposit in your own account and in the account of your minor child can’t exceed Rs 70,000 (Rs 1 lakh w.e.f. Dec 2011)in a FY. But PPF rules doesn’t bar you from making additional deposit beyond the limit of Rs 70,000 (Rs 1 lakh w.e.f. Dec 2011)in the account of your spouse or your major children and accordingly you can claim Rs 1 lakh tax deduction u/s 80C of IT Act.

Q-11: Who can claim section 80C benefit: the person in whose name the PPF a/c stands or the person who deposits money in the PPF account?
Ans: The person who makes the contribution to PPF is entitled for tax benefit. For example, if you invest your money in the PPF account of your spouse, you’ll be entitled to claim section 80C deduction instead of your spouse.

Q-12: Can I contribute to the PPF account of my parent’s and claim section 80C tax benefit?
Ans: No, you’re not allowed to claim tax benefits on the contribution made by you in the PPF account of your mother or father.

Q-13: Is it possible to avail section 80C benefit without making deposits in the PPF account?
Ans: Yes, but only from 7th financial year onwards. The trick is to make partial withdrawals (as mentioned below) and redeposit it in your PPF account.


PPF: Account Opening

Q-14: Is PAN compulsory to open a PPF account?
Ans: No, PAN is not compulsory.

Q-15: Can I open a joint PPF account?
Ans: No, joint PPF accounts are not allowed.

Q-16: Can I open a PPF account in the name of a minor?
Ans: Yes, if you’re a guardian.


PPF: Loans / Withdrawals before Maturity

Q-17: When can I start making partial withdrawals / loans from PPF?
Ans: Loan facility is available from 3rd year to 6th year. From 7th year onwards, you’re allowed to make partial withdrawals. Also note that once you become eligible for withdrawals, no loans are allowed.

The basic difference between the two is that unlike withdrawal facility, loan carries interest and is to be repaid.

Q-18: What is the process for applying for loans and partial withdrawals?
Ans: To avail loans you’ve to fill Form D and for making partial withdrawal from your PPF account, you’ve required to fill up Form C.Further the application should be accompanied with the passbook.

Q-19: How much can I borrow from PPF?
Ans: The amount of loan can’t exceed 25% of the balance at the end of 2nd immediately preceding year. For example, if you apply for loan in 4th financial year, then the maximum amount of loan you can avail is restricted to 25% of the balance at the end of 2nd FY.

Q-20: How much can I withdraw borrow from PPF?
Ans: You’re allowed to make one withdrawal each year after completion of six financial years (i.e., from the beginning of 7th FY). The amount of withdrawal can’t exceed

a.) 50% of the balance at the end of the 4th immediately preceding year, or
b.) 50% of the balance at the end of the immediately preceding year

which ever is lower.

Further, the amount of withdrawal gets reduced by the outstanding loan amount, if any.

For example, if the account was opened in 2004-2005 the first withdrawal can be made during 2010-2011. The amount of withdrawal will be the lower of:

i. 50% of the balance as on March 31, 2007, or
ii. 50% of the balance as on March 31, 2010

Q-21: Can I close the account before maturity?
Ans: No, the premature closure of PPF account is allowed only in case of death.

However there is an exception. Premature closure can be considered after the expiry of 5 years in case of genuine hardship .


PPF: Account Operation

Q-22: How can I change the nomination in my PPF Account?
Ans: By filling up Form F, you can apply for change of nomination in your PPF account.

Q-23: Can PPF account be transferred from one post-office / bank to another?
Ans: Yes, it is possible to transfer from one post office to another or one bank branch to another bank branch. Transfer from Post office to bank & vice versa is also possible. Finally inter bank transfer is also possible.

Q-24: My PPF account is currently inoperative? How do I reactivate it?
Ans: To revive and regularize your PPF account, you'll have to deposit Rs 500 for every year of non-payment along with a penalty of Rs 50 for each year of default.

Q-25: What if I don’t reactivate it?
Ans:The balance in your PPF account will continue to earn interest and repayment of the subscription with interest will be made to you on maturity. In other words, the restrictions are as follows:

1. You can neither apply for a loan nor for a premature withdrawal.
2. Before making any further investment, you’ll have to reactivate it.

Q-26: I’m the nominee of the PPF account of my spouse who expired recently? Can I continue to operate the account?
Ans: No, nominees are not allowed to operate the account of deceased subscriber. The account needs to be closed by submitting Form G together with proof of death.

However, as the account is closed on demand by the nominee, it continues to earn interest till the date of closure.

Q-27: What is the procedure to close the account if the deceased account holder forgot to make a nomination?
Ans: If balance is more than Rs 1 lakh, succession certificate is required.
But if the balance is up to Rs 1 lakh, it can be claimed by legal heirs by filing Form G along with i) a letter of indemnity, ii) an affidavit, iii) a letter of disclaimer on affidavit, iv) a death certificate.

Q-28: What if the minor attains majority before the maturity of PPF account?
Ans: Ex-minor will have to take over the operation of the PPF account by registering his signature (attested by the guardian).


PPF: Post Maturity Operation

Q-29: Can I continue to remain invested after the maturity period?
Ans: Yes, you can continue to remain invested after the initial maturity period of 16years. There are two options available:

-With further subscriptions: This option can be exercised only in writing and in a block of 5 years.

-Without further subscriptions: No conditions attached and no intimation required.

Q-30: How many maximum numbers of extensions are possible after the initial maturity of 16 years?
A: There is no limit imposed on the number of extensions. The only restriction is that every extension is for a block of 5 years in case of continuation with further subscriptions.

Q-31: Can I further invest during the extension period of 5 years?
Ans: Yes, provided you have exercised the option in writing by submitting Form H.

Q-32: What is the time limit of submission of Form H?
Ans: Form H is required to be submitted within a period of one year from the date of maturity.

Q-33: Can I make withdrawals during the period of extension?
Ans: In case you’ve exercised the option to continue the account with further subscriptions, you’re allowed to make one withdrawal per year but the total amount of withdrawal during the 5 year period can’t exceed 60% of the balance in your PPF account at the beginning of each extended period.

On the other hand, if you continue the account without subscription, then there’s no maximum limit imposed on the amount of withdrawal. You can withdraw even the entire amount. The only restriction is that only one withdrawal is allowed in a financial year.


PPF: NRIs

Q-34: I’m a NRI. Can I open a PPF account?
Ans: No, a non-resident Indian (NRI) is not allowed to open a PPF account.

Q-35: I opened a PPF account while I was a resident India. Subsequently, I attained the status of an NRI while the scheme is yet to mature. Now Can I operate it and make further investments?
Ans: Yes, an NRI can continue to make the deposits in the PPF account (which was opened while he was resident Indian) till the maturity.

Q-36: Can a NRI extend the term of his PPF account?
Ans: No, once the PPF account matures, NRI can’t make further extensions. In other words, post-maturity extension is not allowed to NRIs.

In next part, i'll explain the impact of DTC on your PPF investments.


Also see:

1. Salary TDS: FAQs
2. 10 Tips to Invest in PPF
3. Is PPF better than NSC?

75 comments:

  1. It is a good FAQ.
    The link to the '10 tips to invest in PPF' is not working, could you please check it.
    -Shyam

    ReplyDelete
  2. Shyam: Thanks for informing me. Now, I’ve corrected it. Please recheck.

    ReplyDelete
  3. Dear Fisher,

    1. Is there any connection between the age of a person and the extension of a PPF account for 5 year blocks beyond the first maturity? My father is 68 and his first 5 year extension matures on 01-April-2010... can he renew for another 5 years ?

    2. I'm 36 and my PPF matured on 1st April, 2009. Can I start a fresh 15 year PPF a/c after closing my current PPF account ??

    Thanks and God bless you for the good work !!

    Dr. Gagan

    ReplyDelete
  4. Dr. Gagan,

    1. There is no relationship between age of the person and PPF extension. Yes, your father can renew the PPF account for another 5 years.

    2. Yes, of course, you can do it…but opening a new PPF account by closing the existing one, in my view, is not the right course of action. Can you please tell me why do you want to do it? Any specific reason?

    ReplyDelete
  5. Dear Fisher,

    Thanks for your response.

    If I close the PPF account, as it has matured, all of the accumulated balance becomes available... eg, for buying a flat, etc... while if I extend for another 5 yrs, only a part (60%) becomes available...

    However, any suggestions from you are welcome .

    Dr. Gagan

    ReplyDelete
  6. Dr. Gagan,

    Do you know that there is another option where you can extend the account while retaining the flexibility to withdraw the entire amount?

    The only pitfall is that you can’t make any further investments. But in such a case the option is always open to you to invest in the existing / new PPF accounts of your children or spouse.

    Isn’t it the right strategy rather than closing your existing PPF account and opening a new one?

    ReplyDelete
  7. hello,
    i've got ppf account. and i'm also guardian of my 2 kids ppf account. how mach total contribution can I make? is it 70,000/- per head or 70,000/- of our 3 persons?
    Secondly, when shall i invest in ppf for max. benefit? is it before 5th march or 5th april or before any 5th of a month?
    please tell me in detail. as I am really confused.

    ReplyDelete
  8. Radhika,

    The total contribution to your own PPF account combined with contribution to the account of a minor of whom you’re a guardian can’t exceed the limit of Rs 70,000 during a financial year.

    To get the maximum benefit from your PPF account, you should invest by 5th April.

    ReplyDelete
  9. Hi,
    Is it advisable to start investing in PPF considering that the returns would be taxable post the DTC is implemented? Can you create a calculator on the proposed changes & the returns that can be expected post tax. I am a first type investor, aged 30 years. What are the other instruments in which I can start my investments, again considering DTC.

    Thanks,
    b8somnath

    ReplyDelete
  10. Many thanks fisher.
    1 more query pl.
    Can we change the guardian on minor's ppf account?

    ragards,
    radhika

    ReplyDelete
  11. Radhika,

    Sorry, don’t know about it.

    ReplyDelete
  12. Som,

    Yes, it is advisable to invest in PPF despite DTC. For further details, see the post, “How DTC is going to impact your PPF investments”.

    The calculator will be designed once the code is implemented. There is no change in the avenues available for investments under DTC.

    ReplyDelete
  13. please inform me, whether it is possible to invest in ppf according to ppf act more than Rs. 70000 ( including my son who is a minor as well as me ) and can my spouse invest in my ppf account Rs. 30000, if the spouse has already invested Rs. 70000 in the name of that spouse and children.

    ReplyDelete
  14. I have a PPF account. Recently I opened a PPF account for my 1 minor children as well.
    I wish to know WHAT is the MAXimum Amount I CAN deposit For EACH PPF account every financial year.
    Can I deposit a Maximum of 70,000/- in EACH PPF account or IS the TOTAL Deposit of All the PPF account have to be 70,000/- as they Do not earn any income ?

    ReplyDelete
  15. I opened my PPF account in State Bank of India in December 1990. It would complete 20 years on April 01, 2010.When I asked the SBI person about extention , he informed that only one more extention of 5 years is allowed after which one has to compulsarily close his account.
    I read in your blog that 5 year extensions can be for n number of times. Kindly let me know the rule so that I can show the SBI man the rule.
    thanks
    nasir

    ReplyDelete
  16. Hi. Very useful info, however I have a question. What is the maximum limit of amount that can be deposited in a PPF account of a Minor. Please note, Myself and my spouse already have 70000 each in our accounts. Can I invest in my kids account? Though max tax claim can be made for 70000 under sec (c), can I deposit more than that amount in the form of minors account. Kindly advise.

    ReplyDelete
  17. If an NRI inadverdently extends his PPF account after maturity, is there any penalty? What should one do to rectify the error?

    Siddharth

    ReplyDelete
  18. Nooka,

    The answer is no...not possible.

    ReplyDelete
  19. Siddharth,

    As and when it comes to the notice of bank / post-office, the interest credited to your PPF account after the maturity date will be reversed…so, in a way there is indirect penalty.

    To rectify the mistake, get in touch with the respective branch of post-office / bank where you have your PPF account.

    ReplyDelete
  20. I opened my PPF account in State Bank of India in December 1990. It would complete 20 years on April 01, 2010.When I asked the SBI person about extention , he informed that only one more extention of 5 years is allowed after which one has to compulsarily close his account.
    I read in your blog that 5 year extensions can be for n number of times. Kindly let me know the rule so that I can show the SBI man the rule.
    thanks
    nasir

    ReplyDelete
  21. Nasir,

    Just submit Form-H and if the SBI man refuses to accept it, ask him to either give in writing or show the relevant rule. Give it a try!

    ReplyDelete
  22. Dear Fisher,

    1. Is there any latest amendment in the PPF rules saying that new account can not be opened in the name of HUF?

    2. My HUF PPF account has completed the term of 20 years in March-2009 but I wish to extend it further for a block of 5 years. SBI says that it can not be done and it has to be closed.

    Thanks,
    Sanjay

    ReplyDelete
  23. Sanjay,

    With effect from 13 May 2005, HUFs are debarred from opening a new PPF account or extending the existing PPF account.

    ReplyDelete
  24. Dear Fisher Sir,

    Please be kind enough to guide me for second best option apart from PPF, to invest in (tax saving plan 80-C) for my HUF. I want to invest Rs.1,00,000/- and avail total limit under this sec.80-C.

    Thanks
    Sanjay

    ReplyDelete
  25. Sanjay,

    Consider ELSS...for more details, see the Archives.

    ReplyDelete
  26. I have a PPF Account with SBI in Pune. I have come to the US and will be here for couple of years. Can anyone on my behalf deposit money? Can it be deposited anywhere in India? Please help!

    Vineet

    ReplyDelete
  27. RESPECTED SIR,
    MY PPF ACCOUNT OF MY HUF HAS COMPLETED 15 YEARS. PLEASE TELL ME WHEATHER I GET THE INTEREST IF I DO NOT CLOSE THAT ACCOUNT?
    MEHUL

    ReplyDelete
  28. Chandra ShekharAugust 28, 2010

    @ anonymos
    Open a SBI saving a/c and then you can deposit money to your A/c yourself online.
    As such somebody else can also deposit money over the counter

    ReplyDelete
  29. I have a PPF a/c to be matured in Feb.2012 with regular deposits and no loans.I lost my job last year. Now I have no income and facing financial hard ship. Please tell me the authority with address to apply for premature closing of the A/C.
    Thanks
    Ram Swaroop
    ramswaroop2201@gmail.com

    ReplyDelete
  30. My PPF account has been matured 0n 2008.Due to unawareness I forgot to extend it by filling form H.would I still earn interest on the entire balance if yes how long I'll earn the interest on balance.Is it compulsory to close the account.

    Awanish Tiwari (Sagar MP)

    ReplyDelete
  31. Dear Fisher,

    There are lots of info, which would have been really difficult to get, so easily, without your support.

    Thanks.

    Gulab

    ReplyDelete
  32. I want to transfer my PPf accont from haridwar SBI Bank to Noida SBI branch. Can I submit my application for transfer to noida SBI Branch?.
    R K GUPTA
    rkgupta42@gmail.com

    ReplyDelete
  33. sir,
    when we get maximum benifit of PPF means for example ( for financial year 1 april 2010 to march 2011 ) to get maximum benifit, when to invest - before 5 april 2010 or between 1-5 march 2011 ). one of the site suggest that put your money till end of feburary in some FD of bank and then deposit in PPF between 1-5 march.so what is the correct.please clear it

    thanks
    vishnu

    ReplyDelete
  34. maine apne suputr (hemant) ke nam se PPF a/c 1998 me open kiya tha jab uski age 1 year thi but school admition and other govt. record me uska name jay likhaya gaya hai now kya PPF account me minor ka name change kar sakte hai ?

    ReplyDelete
  35. Hi Fisher,

    I am a working mother and plan to open PPF account for my 4 year old son.I already have mine.I am looking at it with investment point of view and not as tax saver for me.
    Can you tell me is it a wise decision ?.What will be benefits of it?.
    I will be guardian for the same account till he turns major but what will be the scene after that ,will i have authority of that account or he will have powers on that account.

    Please can u throw detail light on it.

    ReplyDelete
  36. Dear Fisher,

    I am an NRI.I understand that I can not have PPF a/c.My son is a student and a major. Can I open an a/c in his name nominating me and my wife. I wish to contribute max 70k annually till I retire say in 7 years. and can he continue by contributing from his income. It may not be the same amount. Can I also contribute to his a/c after residency.
    if possible at that time. Please advise. Your faq and calculator is very useful. How to open an a/c by him. He is in Mumbai.
    regards,
    Ram

    ReplyDelete
  37. Ram,

    Yes, your major son can open a PPF in his own name. Both of you can contribute any amount either in lump sum or in installments, but the total deposit in a financial year should not exceed Rs 70,000. Your residential status does not matter since the account will be in your son’s name.

    For more information, you should also read ‘How to invest in PPF: 10 Practical Tips’ and ‘11 PPF – Pitfalls’. See the links from the Archives.

    ReplyDelete
  38. Dear Fisher,

    I became an NRI 3 yrs back. I have a PPF account which will complete 15 yrs in Mar 2012. Even though, I cannot add any contribution after that, but can I keep the accumulated money in the account and get interest on that.

    Rgds,

    Anurag

    ReplyDelete
  39. I opened PPF a/c in name of my daughter under my gaurdianship when she was 11 months old, after that we changed her name. now she is 10 yrs old. I want to know the procedure to change her name in PPF a/c.

    ReplyDelete
  40. Dear Fisher,
    I have opened a PPF account (in the post officer) on 22nd Dec 2010 and on same date deposited in cash Rs 70 thousand. Had I opened this account (hypothetically speaking) on 01st April 2010 and deposited Rs 70000, the earliest my PPF acccount would realise (in either case be it 22nd Dec or 1 Apr 2010) would be 31st Mar 2026. Question is, do I gain more if the account was opened on 01st Apr 2010 instead of 22nd Dec (as is the case) or it does not make any difference at all. Pls advise.

    ReplyDelete
  41. Anurag,

    Post maturity extension is not allowed to an NRI, so you'll not get interest after maturity...delaying the withdrawal won't serve any purpose.


    Amit,

    It does make a difference because in case of deposit in the month of April, your money stays invested for longer duration. To know about the amount of difference, try PPF Calculator.

    ReplyDelete
  42. Hi, please clarify after maturity of the account if I do not close the account (but choose not to contribute), does my maturity amount will fetch intrest at prevailing rate? Can I keep on withdrawing money as per my requirement for few years, till I exhaust complete amount (in the mean time earning intrest on balance in account)?

    Hemant

    ReplyDelete
  43. Hemant,

    Yes, your PPF Account will continue to fetch the interest at the prevailing rate even if you extend your account without making any further deposits.

    Yes, you can keep on withdrawing the money as per your requirements till you exhaust the complete amount while the remaining balance in your PPF Account will continue to earn interest. However, you're not allowed more than one withdrawal in a financial year.

    ReplyDelete
  44. I opened PPF acconts in the names of my two sons, when they were minors. They have turned major, while studying overseas. The Bank where their accounts have been opened is refusing to accept additional deposits into their PPF accounts. What documentation needs to be completed to enable continuing the deposits.

    ReplyDelete
  45. I wanted to know if the PPF account holder has died before maturity of the account and his/her spouse and children are joined nominees, then what has to be done and need to submit for claiming the amount, is there any time limit for claim, if yes then how long, are both nominees needed for any formalities, consequences of non removal if either nominee doesn't want to withdraw.

    Please do reply.
    Thank you.

    ReplyDelete
  46. Anonymous,

    There is no fixed time limit of claim after the death of the PPF Account holder; the PPF balance is payable on demand by the nominees…till that time it will continue to earn interest. However, it is in the interest of nominee(s) to withdraw the amount because a nominee can’t appoint a further nominee.

    Yes, both nominees are needed for the closure of the account…they need to prove their identities.

    Partial withdrawal/closure of PPF Account after death of the account holder is not possible.


    Anonymous,

    Now that your sons have attained majority, they have become the legal owners of the PPF Account. For transferring the account operation in their names, registration of their signatures–attested by the guardian—is required.

    ReplyDelete
  47. Hi,

    This is Munaf Here. Currently 'm located in Atlanta and I want to make payment to my existing PPF account. My PPF account is with SBI, Dadar branch. When I try to trasnfer fund from my SBI savings account, system sends high security password to my India mobile number, which is inactive. Hence can't transfer from SBI savings account.

    How can I transfer fund online to my PPF account from non-sbi bank (eg. Citi Bank, ICICI Bank) ? When I registed my PPF account with Citi bank online transfer, I selected account type as Savings (there were only 2 options, Current & Savings).

    Please advice

    ReplyDelete
  48. 1. Upon death of a PPF a/c holder, he has nominated two of his heirs to share it equally, can the Bank settle claim of one of them?
    2. If the other person doesn't come forward to claim the amount for whatever reason what are the options open? What happens to the unclaimed amount? Can the other nominee claim this?
    Anand

    ReplyDelete
  49. If you are staying abroad and want to transfer fund to your PPF account, you can use SBI remittance to do that.

    ReplyDelete
  50. Hi

    I have a SBI Joint account - my wife being the 2nd holder. Now if I transfer money to my Wife's PPF account ONLINE through the above joint account, whose contribution shall it be considered? i.e. Who can avail 80C benefit for the above transaction?
    [ Note: Both me and my wife contribute to the above joint account from our Salary accounts respectively]

    ReplyDelete
  51. Hi

    If i make contibutions to my fathers PPF account, i will be the nominee. But i read that sucession certificate is required to claim the amount in event of his death if the maturity amount is more than 1 lakh. Cant i have a will for this ppf account stating that the proceeds of the ppf account after his death should be solely mine. Is the sucession certificate a must if i have a will.

    ReplyDelete
  52. I am sorry to tell but unfortunately the SBI guys at my operating branch have no idea of the PPF rules. The SBI staff extended by PPF a/c ( opened before I became NRI ) for 5 more years after maturity even when I informed him that I am a NRI.

    Even tough one can deposit 70,000.00 ( max ) in PPF a/c as per rules but my friend is still able to deposit more than that in a financial year. What will happen in this ? He will get interest for the full amount or only for 70,000 ?

    I am NRI staying abroad with my family. Is it still okay to open a/c in my wife's or son's ( minor ) name ?

    Thanks in advance.

    Sunny T.

    ReplyDelete
  53. Hello,

    I have got into a unique problem. My father-in-law opened a PPF account on name of my wife when she was minor (unmarried and without having a PAN)

    After marriage I was not-knowing about the fact above I opened a new PPF account (now having PAN, which indicated both her former and new name after marriage).

    As having two PPF on same name is illegal, i am in a mesh. My in-laws has the account operative for more than 6-7 year. While opening the New account I made a hefty deposit of 40k.

    So am in a trap of leaving 40k without any interest for 15 years (a bad idea). Or Close the new PPF account (I don't know process for this kind of problem. And whether they'd allow it or not)

    Can somebody guide me please ? Thx in advance

    ReplyDelete
  54. Hi ..My PPF account has matured after 15-16 years and I have closed the same. Now Can I open a new account in the same bank? Is there any restrcistions? SBI says I can not open a new account, inspite of the fact that I have clsoed the earlier account after maturity..Kindly calrify. - Muthu

    ReplyDelete
  55. Dear Mr Fisher

    I had a PPF account maturity date 31/3/10.

    As I needed the money, I had closed the account on 23/2/11, but the bank gave me only Rs 4 Lakhs as the balance on 31/3/10 and no intt for the period of 1/4/10 to 31/1/11.

    Am I eligible to get that interest?

    Please advise.

    There are similar queries, but have not been answered.

    Thanks for the help.

    Regards

    K K Goyal
    kkgoyalsisi@gmail.com

    ReplyDelete
  56. Please let me know whether a resident who subsequently becomes a NRI, can keep the account alive after maturity without subscribing /extending the account.
    If so till what period can such account be kept and earn interest? what will be ITax impact on such interest.

    ReplyDelete
  57. NRI PPF Accounts - After maturity of the account can NRIs leave the money in the account, without further subscription, and continue to earn interest on the balance at PPF rates?
    The amendment of December 2010 makes it mandatory to close already matured HUF accounts by 31 March 2011.
    Is there any similar direction for NRI PPF accounts?
    Rajesh

    ReplyDelete
  58. AnonymousMay 02, 2011

    It is understood that an NRI can contribute to his already running PPF account, till the time of its matuity. Kindly guide me whether an NRI can claim 80c benefit for such contribution for the current assessment year.

    ReplyDelete
  59. AnonymousMay 26, 2011

    I am an NRI. My PPF account (opened when I was an Indian resident), has matured. How can I close it. Can I repatriate the money? What is the best way to repatriate/invest it?
    Thanks,
    Vinni

    ReplyDelete
  60. AnonymousJune 29, 2011

    Hi,
    I have a PPF account in SBI and i also hold a SBI savings account. How to i transfer fund to my PPF account online? I mean what category of transfer will it be? Will it be Third Party Transfer, Fund Transfer or Inter Bank Transfer?

    thanks in advance
    Prasoon

    ReplyDelete
  61. AnonymousJuly 04, 2011

    Dear Fisher,

    Me and my wife both are working and both of us would like to invest in PPF in the name of our daughter. Is it necessary to open two different PPF accounts or we both can deposit in the same account and claim the tax benefit?
    Kunal

    ReplyDelete
  62. Dear Mr.Fisher
    It is a very good FAQ.I wnt to know that
    (i) I extended my PPF account after maturity for a period of 5 years but now I want to close my account during the extended period.Whether it is permissible

    Harish

    ReplyDelete
  63. Dear Sir,
    By mistake I have opened two PPF account with SBI in the gap of 4 years. Amount deposited in the first account is less than Rs500. Right now i am using only the second account only. i want to know is there any problem.

    ReplyDelete
  64. Anup

    My father has already a PPF account in his name from last 13 years & has also opened PPF account in name of his spouse & 'ME' also (age 20 years) & currently my father is depositing to my account. So can he hold three accounts in three different names.

    ReplyDelete
  65. My father has opened a PPF account in his name & one for the spouse & has opened a account for me (major child) also. So does he have to invest
    Rs. 70000 in each a/c. or Rs. 70000 combined together?

    ReplyDelete
  66. Is it necessary to pay same amount every year? Or one can pay it in between Rs.500 to Rs. 70000.

    ReplyDelete
  67. It not necessary to pay same amount. You can pay anything between 500 and 70k.

    ReplyDelete
  68. I am 38 and dont have a PPF account yet. Is is advisable to open it at such a late age considering there is a lock in period of 15 years?

    Thanks, Venkat

    ReplyDelete
    Replies
    1. My dad's PPF a/c was opened when he was 78 years old. It was extended on the completion of 15 years on maturity, by 5 years though reluctantly by the SBI bank, by repeatedly give form F instead of form H for extension application !

      Delete
  69. Hey Venkat,

    I don't think age should be a deciding factor for opening a PPF account. One of my relative open PPF account in much later age. Primary factor to consider while opening PPF account should be your income flow, because PPF account is a committed account where one has to put at least minimum amount every year.

    All the best Venkat

    ... Munaf

    ReplyDelete
  70. Dear Fischer,

    I was unaware about the combined ceiling of Rs 70,000 ( Rs 100,000) for self and minor account and have been depositing Rs 70,000 in both accounts for the past 7 years. I realized my blunder when a bank officer pointed it out to me quite recently. My questions:

    1) Should the bank have accepted the excess deposit?
    2) The interest has also been credited to the minor accounts all this while. Will this be completely reversed
    3) What is the best case scenario? Is there any case to negotiate with the bank citing negligence on their part for not having informed earlier?
    4) How soon must ther bank refund the excess amount?

    ReplyDelete
  71. I had opened a PPF account in my name and another in the name of my minor son. Without realizing my blunder, I was depositing Rs 70,000 each in both these accounts for the past 7 years. Only recently, the bank pointed out to me that the Rs 70,000 was a combined limit in case of a guardian and minor scenario. My question

    1) Should the bank have accepted the excess deposit for the last 7 years
    2) The minor's account passbook is updated and interest has been regularly credited. Will the entire accrued interest pertaining to the excess deposit be reversed?
    3) Do I have any case against the bank for not refunding these excess amounts earlier. How soon is the bank supposed to refund these deposits?
    4) What is the way forward. Ballpark calculation suggest I stand to lose an interest amount of Rs 1.25 lakhs

    Please guide

    ReplyDelete
  72. can i extend my PPF account for further five years as my PPF account has been expired on 7th february 2012 with the state bank of india.

    ReplyDelete
  73. Regarding answer to Q 26 . : The state Bank of India , Golibar Maidan Branch, Pune , Gave to the nominee the interest computed only upto the last day of the previous month of the month of closure by nominee (Spouse) on form G . They refused to give interest upto the date of closure.

    ReplyDelete
  74. I have a PPf account opened in 1997. I made only one deposit in that account.I did not pay any further credits therein. Now the SBI says I will have to pay penalty for 15 years for not making any contribution to it. There is a provision of penalty for renewing the accout in case of defalt of nonpayment during the currency of of the prescribed period of 15 years but there is no provision for paying penalty when maturity value is due. Is there any specific provision in this regard? The Bank branch is ignorant about any rule nor they have any book PPF. pl advice.

    ReplyDelete

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