The Public Provident Fund Scheme : Features
Flash News: Interest rate on PPF has been reduced by 0.1 percent from 8.7% to rate 8.8%. The new rates are effective from April 1, 2013.
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An individual can have only one PPF account. However, he can
open an account in his minor child's name.
·
The ceiling of deposit
of amount in PPF account increased to Rs. 1.50 lac proposed in budget 2014
(Earlier this limit was revised from Rs. 70,000 per annum to Rs. 1 lac per
annum w.e.f. 01.12.2011).
·
Deposits made in PPF accounts ( Upto a maximum of limit of
investment per annum ) are eligible for deduction under Section 80C of Income
Tax Act upto limit of Rs. 150,000. (The ceiling of deposit of amount in PPF
account increased to Rs. 1.50 lac proposed in budget 2014)
·
If you have opened two PPF accounts long ago; close the second
a/c - your bank or post office will return the principal invested without
interest on your second PPF account.
·
There is no concept of joint holding in a PPF account. It has to
be in a single name only. You can however nominate your dependents to your PPF
account.
·
Interest is computed on the minimum balance between the 5th and
end of a month. If you are investing a lump sum to save tax, deposit the amount
before march 5 of the year to get interest on your deposit. Therefore, to get
interest on your deposit for the month in which the amount deposited; the
amount be deposited before 5th day of the month.
·
You cannot offer the balance in your PPF account as collateral
to take a loan. Nominee can claim the balance in the PPF account holder. they
cannot continue the account or make additional contributions.
·
Balance in PPF account cannot be attached under court decree.
·
Entire deposit in a PPF account is exempt from the Wealth Tax.
·
The deposit in a minor account is clubbed with the deposit of
the account of the guardian for the limit of Rs. 1,00,000/-. limit revised from
Rs. 70,000/- w.e.f. 01.12.2011
Details of the PPF Scheme
When The Public Provident Fund Scheme (PPF) came into force
THE PUBLIC PROVIDENT
FUND SCHEME, 1968 [Issued vide Government of India, MOF (DEA) Notification No.
GSR 1136 dated 15.6.1968 and further amended from time to time]
GSR 1136;- In exercise
of the power conferred by Section 3 of the Public Provident Fund Act, 1968 (23
of 1968), the Central Government hereby makes the scheme, namely:- Public
Provident Fund Scheme, 1968.
The scheme came into
force on Ist July, 1968.