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Saturday, 10 September 2016

Public Provident Fund (PPF)


Public Provident Fund (PPF)

The Public Provident Fund (PPF) Scheme, 1968 is a tax-free & voluntary savings scheme that was introduced by the Ministry of Finance in India in the year 1968. The amount earned as interest on deposit in PPF account is totally tax free and we claim the deposit amount invested in PPF as Income tax deductions under Sec 80C.

Key Feature of Public Provident Fund (PPF) Accounts

1)    We can open a Public Provident Fund (PPF) account in any authorized and nationalized public sector bank and post office.
2)    Any Indian citizen above the age of 18 year can open a PPF account but there is no any upper age limit.
3)    Non-resident Indians (NRIs) cannot open a PPF account. However, if the account has open as resident and there after he leave the country and obtain non-resident status can continue to maintain their accounts until it matures.
4)    Interest rate announced and set by the government of India in the Union Budget.
5)    In the current Financial Year 2016-17, Interest rate is set to 8.10%.
6)    All tax saving scheme has a locking period of 5 years, in case of PPF there is also a locking period of 5 year after that we partially withdraw the amount of PPF.
7)    Amount in PPF can be deposit through branch and also from the Internet Banking facility provide by Bank.

Period:

The total period of PPF account is 15 year with an extension of another 5 year period so we can say the total period of PPF account after extension is 20 (15+5) years.

Interest Rate

As directed and announced by the government of India in their Union Budget, for current FY 2016-17 is 8.10%.

Minimum Deposit Amount

Account can be open with a minimum amount of Rs. 100/- but as per guideline of government of India, the minimum deposit should be Rs 500/- per financial Year for satisfactory running of the account.

Maximum Deposit Amount

The maximum deposit amount per financial Year is Rs. 1,50,000/-.     

Loan Facility

It provides the loan facility against the deposit held in their PPF account from the 3rd year.

Nomination Facility

As per guideline of Government of India all account should have the nomination but it is not mandatory. By nomination in the account is it easy to withdraw after accident of account holder.

Transfer Of Account


The account can be transferred to other branches/ other banks or Post Offices and vice versa upon request by the subscriber. The service is free of charges


Tax Benefit
Amount deposit in PPF can be claim under Sec 80C.

KYC for PPF

1.    Passport
2.    PAN Card
3.    Aadhaar Card
4.    Driving License
5.    Voter’s ID
6.    Bank Account Statement


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