PPF Alert: Top 5 basic details that every Public Provident Fund account holder must know

PPF Alert: PPF or Public Provident Fund is one of the most favoured retirement-oriented investment tools that fetch income tax exemption as well.

PPF account holder can invest a minimum of Rs 500 to a maximum of Rs 1.5 lakh per annum. The upper limit is inclusive of all other PPF accounts opened by an individual. Photo: Reuters

PPF Alert: PPF or Public Provident Fund is one of the most favoured retirement-oriented investment tools that fetch income tax exemption as well (provided the taxpayer is in old income tax regime). According to tax and investment expert PPF account has a maturity period of 15 years and the Department of Economic Affairs has kept PPF interest rate unchanged at 7.9 per cent in January to March 2020. However, one can increase one's PPF account for five years to avail of the benefits being bestowed on by the government. Recently, some PPF rules have been changed as well. Therefore, a PPF account holder needs to know some information, which is important from an investor's perspective.

Speaking on the PPF rules and recent changes Jitendra Solanki, a SEBI registered tax and investment expert said, "Most important change made in recent Finance Ministry's notification in regard to PPF is lowering the interest rate on loan against PPF from 2 per cent to 1 per cent. Earlier, premature closure of PPF was not allowed, now one can close one's PPF account after five years of investment and joint PPF account can't be opened."

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Asked about the top 5 important information that a PPF account holder needs to be aware of Solanki listed out the following information:

1] One individual can have only one PPF account and one PPF minor account. The PPF minor account can be opened by either of the parents and in case of a specially-abled child, a guardian can open a PPF minor account even though the mentally challenged child is an adult.

2] A PPF account holder can invest a minimum of Rs 500 to a maximum of Rs 1.5 lakh per annum. The upper limit is inclusive of all other PPF accounts opened by an individual means the net investment by an individual in one's PPF account and PPF Minor accounts should not go beyond Rs 1.5 lakh in a year.

3] In case of a change in one's residential address, premature PPF account closure is allowed but not before five years of the PPF account.

4] In the case of any debt-default by the PPF account holder, the PPF account can't be attached against any court decree. so, your PPF balance can be an emergency fund in the case of such financial default; and

5] PPF account can be revived during the maturity period through the payment of Rs 50 and Rs 500 arrears for each year of PPF investment default.

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