At the end of each month, a portion of income is saved which is not spent anywhere. This part of the income is known as Savings.
Everyone's thinking is different. There are some people who do not have financial literacy, they want to keep their savings in cash, then some people are a little sensible that they do not have cash at home, and they do not have a safe instrument like Savings Account, Fixed Deposit, Recurring Invest in Deposit etc.
There are some people who want something to earn their livelihood every month, they invest their saved money in the Monthly Income Scheme and there are some people who are more and more on their savings Return want to earn, so they want to increase their wealth by investing in Savings as Risky Instrument such as Mutual Fund, Equity Fund, Debt Fund, and earning as much as possible.
There are several ways to invest money saved in this way, one of them is the Public Provident Fund Scheme.
What is Public Provident Fund
Public Provident Fund Scheme, also known as PPF. This scheme is a tax-free way to do Savings, which was introduced by the Ministry of Finance in 1968.
Tax Deductions can also be taken under Section 80C of the Income Tax Act, 1961 of the deposit made in the PPF Scheme. Also, Whole Maturity Amount, which is received when the account is mature, is also tax free. For this reason, this scheme is considered as Tax Efficient Instrument.
This scheme was launched among Indians so that Indian People moved towards Savings and they could secure their retirement by making a good fund till their retirement.
Features of Public Provident Fund Account
- PPF Account can be opened in any Post Office. Even the PPF account can be opened in government / public sector such as SBI, PNB or Private Sectors such as ICICI, Axis Bank etc.
- This scheme can be deposited up to a maximum of Rs. 1,50,000 / - and Minimum 500 rupees in each financial year.
- In this scheme, Investor can deposit Funds to earn a return on their Savings till a fixed period.
- Since the PPF Scheme is a government scheme. Therefore there is no risk of non-payment. That is, your savings are completely secured.
- Amount can either deposit a lump in the account otherwise you can also deposit Amount in the installments. But Amount can not be deposited more than 12 times in a financial year.
- You can not open New PPF Account Open until the first PPF Account Expire is done.
- PPF Account can be opened only individually. Joint PPF Account can not be opened.
- PPF Account can be opened by Cash Amount or Cheque, but when the account is opened by Cheque, then on the day when the realization of Cheque in Government Account, the same date will be the Date of Account Opening.
- Nomination facility is also available in PPF Account like all other accounts such as Saving Account, Monthly Income Scheme Account, RD Account, Time Deposit Account, which you can take when you open Account or if you want anytime after Account Open Can take. And one important thing is that if you want a PPF Account Holder you can also change your Nominee.
- A PPF account opened in the post office or bank of a city in India can also be transferred to a post office or bank in another city.
- When your PPF Account is mature and you want to extend it without closing it, you can extend it for 5 years and within one year of getting the account mature.
- Whatever interest you make in this scheme, it is completely tax free and along with the amount that Amount Receive on maturity is also completely tax free.
- Permission is to be withdrawn annually from the 7th Financial Year of the year you have opened the PPF Account.
- You can also take PPF Account Against Loan. You can take loan facility from the 3rd year of the year that you have opened PPF Account.
- However, NRI people are not Eligible to invest in this scheme. But if a person has invested in this scheme and after that it has become an NRI then that person account has maturity, or if someone has extended the account to maturity after 5 years and afterwards became an NRI person In that case, the account can be kept continuously until the 5 Years Extension Block expires. After the account is mature, the Depositor is deposited in the account without any interest account.
- If the account holder Person has become an NRI even before the maturity period of 15 years, then such account can not be extended on maturity and for 5 years. Similarly, if the account has been expanded for 5 years, after the Account Holder Person has become NRI, then the further account can not be further extended.
- Only one PPF Account can be opened by a person. Mean Multi PPF Account is not allowed. In the case of multiple account only interest will be given on First Account, no interest of any kind will be payable on other accounts and all accounts are merged with PPF account first.
- There is no eligible to invest in this scheme on behalf of an Individual Person, HUF (Hindi Undivided Family) or Association of Person (AOP).
- It is mandatory to deposit at least 500 rupees in each financial year in this scheme, otherwise 50 rupees have to be paid as Penalty.
- You can open her Parents Account on behalf of Minor Person. Both parents and parents can not have a separate PPF Account Open on the name of Same Minor Child and Grand Parents can not even open their PPF Account Open on the name of their Grand Minor Child.
- Annually Compound Interest Calculate is done in this scheme and it is credited to Account on 31st March.
- PPF Scheme One important thing is that in this scheme, not only can Salaried Person or Employee Account Open, but also the common man can invest in this scheme by opening an account.
Premature Withdraw Rules from PPF Account
The maturity period of the PPF account is 15 years and the deposit in the PPF Account can be taken with the entire Amount only when the PPF account becomes mature.
But it is not necessary that you can withdraw Deposit Amount in your account only when your PPF account is mature, but in case of a crisis, you can also 50% partial withdraw from the Deposit Amount in your PPF Account.
But Premature Withdraw can also be done only when your PPF Account has been open for 7 years.
Premature Closer Rules of PPF Account
Before the PPF account is mature, Premature Close can be done only in one situation when the PPF Account Holder dies. In this situation, as soon as the PPF account holder dies, the account is returned to the Deposit Amount with Interest, Nominee Person.
How to Open PPF Account
Opening can be done by going to the Nationalized Bank Branch, specified by the PPF Account, Physically Post Office or Government. Or you can also open the online PPF Account using Internet Banking.
You will have to submit a PPF Account Opening Form in order to open a PPF Account by going to the Post Office or Bank physically. You can get this form by clicking on the related post office or bank branch or by downloading online. With this form, the account holder should have Attachment by filing a nomination form for the account holder, who should get the deposit in PPF Account after the ID Proof, Address Proof, Photograph and Account Holder.
Once your PPF account opens, a passbook issue is issued after the PPF Account is opened by the Post Office in the same manner as if you have a Passbook Issue at the time of getting the Bank Account Open. In this passbook, you have to enter the Transactions relating to the deposit, Withdrawal and interest in the account which are credited to the account in PPF Account. The most requirement of this passbook is when you want to claim tax benefits / deductions under Section 80C of Income Tax Act, 1961 for your PPF.
PPF Account can be opened by visiting the Bank's Official Website. By opening an online account, users get many benefits like time saved, hard work is reduced, Traveling Cost survives, Banks have to survive a long-term line.
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