- Public Provident Fund Scheme is a long-term saving scheme for a period of minimum fifteen years and can be extended further in blocks of five years each for any number of blocks.
- The extension of 5-year block can be with or without contribution.
- Interest rate is 8% with effect from 1st April, 2016. Interest is calculated for one calendar month on the minimum balance in the Public Provident Fund Account from fifth day of the month to end of the month. Interest is credited to the Public Provident Fund account at the end of financial year by Bank or Post office. The subscriber can plan accordingly to deposit in Public Provident Fund Account before fifth date of the start of the month to earn maximum interest.
- Interest income on PPF contribution is exempted from income tax.
- Minimum subscription of Rs. 500/- and maximum subscription of Rs. 1,50,000/- per financial year can be made.
- Subscription is also exempt from income tax as per section 80C of Income Tax Act,1961.
- Subscription should be in multiples of Rs. 5/-
- Public Provident Fund is a Central Government guaranteed low risk investment fund.
- Public Provident Fund Account is not to be attached by the Central Government or Court for the payment of subscribers’ debt or liability payment.
- Public Provident Fund Scheme gives facilities to its subscribers to withdraw amount by way of loan from the Fund account for their various financial needs such as wedding of self or children or relative, education, medical assistance, purchase of property etc. One can also withdraw the fund itself from Public Provident Fund account for assistance in aforementioned occasions.
- The account of Public Provident Fund can be opened by the guardian of a minor acting on the minor’s behalf. When minor crosses 18 years and attains majority before the account tenure of 15 years is over, he or she may continue to maintain deposit under his or her signature.
- Executor of deceased person cannot operate or subscribe any amount from the income belonging to the dead subscriber to his or her Public Provident Fund account after the subscribers’ death.
- Public Provident Fund account can be opened at any age.
- Public provident Fund account can also be opened by organized sector employees who already have Employee’s Provident Fund account.
- Joint name PPF Account cannot be opened.
- Non-resident individuals are not eligible to open Public Provident Fund account. In case any account holder became non-resident during the period of fifteen years of block period, he/she may continue to operate the account till its maturity on the basis of non-repatriation.
- Form A is related to opening of a Public Provident Fund account. It is submitted along with 2 passport size photographs, address proof, identity proof and in case of minor, birth certificate.
- Form E is related to nomination in Public Provident Fund account and can be submitted any time.
- Subscriber can deposit amount in Public Provident Fund Account in Form B which is also known as challan.
- The subscriber may deposit into Public Provident Fund Account on monthly installment basis subject to maximum 12 deposits in a year.
- The Public Provident Fund account is transferable from any bank to any other bank or post office or vice-versa.
The subscriber may if he or she so wants, withdraw at any time which is after the end of 5 years from the end of the year in which initial deposit was done. Such a withdrawal can be made only through Form C which is to be submitted to the bank or the post office along with the bank pass book. Such withdrawal will be from the balance that stands to his or her credit at the end of 4th year immediately before the year when the withdrawal was made or at the end of the earlier year, whichever is lower. Amount of withdrawal cannot exceed 50% of the balance at his or her credit less any amount of loan previously withdrawn still standing unpaid provided that during any year a maximum of one withdrawal shall be permissible.
The subscriber may at any time after the end of the 1st year from the end of the year in which the actual deposit was done but earlier than the end of the period of 5 years from the end of the year in which the initial deposit was made, may, by submitting an application in Form - D along with pass book to the Bank or post office get a loan of an amount not exceeding 25% of amount lying to the credit of his or her account at the end of the 2nd year immediately preceding the year in which the loan is applied for. Loan facilities can be availed between the third and sixth financial year only.
The Subscriber may at any time after maturity (end of fifteen years) from the end of the year in which the initial deposit was made by him/her, by submitting an application in Form-C along with pass book to the Bank or post office may withdraw the complete amount lying in his or her account.
The Subscriber of Public Provident Fund account may after the expiry of tenure of fifteen years from the end of the year in which the initial deposit was made but before the end of one year, may choose the option with the Bank or post office, to continue his account, by submitting an application in Form-H and thus continued to subscribe to the account for an additional period of five years.