The Public Provident Fund Scheme has introduced
by Central Govt. on 1st July 1961. PPF account cannot be opened in joint names
or as company. It also prohibits NRI’s from opening an PPF account.
SUBSCRIPTION & FREQUENCY:
·
The minimum amount on has to deposit in financial
year is 500/- not paid in instalment & in multiple of Rs. 5/- and the
maximum amount on has invest in PPF is Rs. 100000/-** whether in his name or
jointly with minors and in a maximum of 12 installments in that financial year.
·
A PPF account will be discontinued if minimum
amount of Rs. 500/- not deposited in year but it can be restored with deposit
of Rs. 50/- per year of default plus minimum subscription.
·
The account under this scheme can open in any
branch of State Bank of India, and its subsidiaries, or in any Head Post Office
or any Selected Post Office or any of Nationalized Bank.
TERMS:
·
The term/duration of PPF
account is 15 years from the end of financial year in which the account is opened but can be
extended for one or more block of 5 years after 15 years
·
Subscriber can avail the withdrawal facility from
the PPF account after the expiry of the 5 financial years from the end of year
in which the initial subscription was made by applying in form C.
·
Only one withdrawal in a year is allowed.
TAX BENEFITS:
·
The interest recoverable against loan taken from
PPF account shall accrue to the Central Government.
·
U/s 80C of
Income Tax Act, 1961 investment in PPF is qualified for deduction. Investment in
PPF account earns interest 8% per annum compounded annually.
·
The interest earned in PPF account is tax free
U/s 10(11) of the income tax act
·
Deposits credit balance under in PPF account
is free of Wealth Tax.
OTHER BENEFITS:
- Loan can be taken after the expiry of one year from the end of the year in which initial subscription is made but before expiry of five years from the end of the year in which initial subscription was made. Application for the same has to make in the form D.
- Loan is allowed up to 25% of balance of PPF account including interest at end of second year immediately preceding the year in which the loan is applied.
- Subscriber can avail the withdrawal facility from the PPF account after the expiry of the 5 financial years from the end of year in which the initial subscription was made by applying in form C
Contact us : cabipinkothari@gmail.com
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