Public Provident Fund was introduced in 1968 and since then, it has been a popular investment tool in India owing to its guaranteed safe returns. You get tax free interest in your PPF account. PPF accounts come under the EEE (Exempt, Exempt, Exempt) category. But there are certain circumstances in which you may no longer receive those interests. To know more, continue reading. India’s First Free Online Financial Advisory Moneymindz
PPF has its own set of rules and regulations, Not adhering to them can result in your account being termed irregular.
1. Annually contributing less than Rs 500
You are required to deposit Rs 500 as a minimum per year. Otherwise, your account will be considered irregular. So always make sure you deposit Rs 500 annually. The maximum limit for contributing is 1.5 Lakh. India’s First Free On call Financial Advisory Moneymindz
2. Annually contributing more than Rs 1.5 Lakh
The minimum limit for contributing is Rs 500. But if you make contributions of more than 1.5 Lakh annually, the excess amount will be treated as irregular subscriptions and will not earn interest. So make sure you limit your contribution to between the minimum and maximum limits.
3. Numerous PPF accounts
An individual is permitted to own only one PPF account. Apart from that, he/she can open a PPF account in the name of a minor as a parent/guardian. But if you already have one PPF account and want to open another one for yourself or for co-owning it with another adult, you are not allowed to do so. Similarly, two people cannot open different PPF accounts in the name of the same minor child. Kuber Mindz, Smart Financial Advisor
4. Opening an account in joint names
As mentioned in the previous point, you cannot open a PPF account to co-own it with another adult. You can hold an account in the name of a minor child, provided you are a parent or a guardian of the minor, but not for another adult. But you can keep another person as a nominee in your PPF account.
5. Contributing after the maturity date
The lock-in period for PPF is 15 years. After 15 years, you can extend the maturity of PPF by a block of five years by submitting an application to your bank/post office. But if you continue making deposits after the maturity period without informing your bank/post office, the contributions will be considered irregular and no interest and tax benefits will apply.
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