Govt may allow early closure of PPF accounts

Govt may allow early closure of PPF accounts

NEW DELHI: The Union government said on Tuesday that it is retaining the basic elements of the popular public provident fund scheme+ -—including tax exemptions and the interest rate policy — but is building in new facilities such as allowing investors to opt out of the scheme before the completion of five years.
The government has proposed several amendments to the laws governing small savings schemes such as PPF and National Savings Certificate, which have raised apprehensions about subscribers losing out on several benefits.

In a statement, the finance ministry said that in case of exigencies, such as medical emergencies or higher education needs, PPF accounts will now be allowed to close prematurely.

Investment in small savings schemes can be made by a guardian on behalf of a minor under the provisions proposed in the Bill and the guardian may also be given associated rights and responsibilities.

There was no clear provision earlier, regarding deposit by minors in the existing laws and the new element has been incorporated to promote savings among children, the statement said. Similarly, a specific provision has been inserted to allow operation of small savings accounts by differently-abled persons.

Also, new provisions have been built in to avoid any dispute in case of death of an investor in small savings scheme, given Supreme Court rulings. A grievance redressal mechanism has also been put in place for amicable and expeditious settlement of disputes. “The above provisions, which are proposed to be incorporated in the amended Act, will add to the flexibility in operation of the account under small savings schemes.

Apart from offering higher interest rates compared to bank deposits, some of the small savings schemes also enjoy income tax benefits. No change in interest rate or tax policy on small savings scheme is being made through this amendment,” the finance ministry statement said.
The government also said no existing benefit is proposed to be withdrawn, pointing specifically to the fact that PPF accounts cannot be attached through a court order. “The main objective of proposing a common Act (for small savings) is to make implementation easier for the depositors as they need not go through different rules for understanding the provision of various small saving schemes, and also to introduce certain flexibilities for the investors,” the statement said.

40 Replies to “Govt may allow early closure of PPF accounts”

  1. The Government may please consider allowing clsoure of account on attaining the age of 60 years which is the age for superannuation and the earnings of the retired persons will be inadequate to meet commitments and monies from clsosing PPF will be handy.

    1. To share my experience, I am 68 and still maintaining my account. The benefit is that I am still enjoying the tax free interest which meets my requirements to a large extent, and enables me to keep depositing sums and availing 80C tax exemptions, in addition.

      1. I am 80 years old and am still maintaining my PPF account opened in 1969.
        Every year I withdraw a certain sum less than the interest that I got on the 31st March of the previous year.
        I also deposit Rs 1.50 Lakhs, to get the 80C benefit.
        I renew my PFF account every five years.

        1. Sir,
          start with ELSS for Rs 1.50 Lakhs, to get the 80C benefit.
          Can withdraw after 3 years.

          What more ,, earn 12% -15% CAGR !

  2. Government must consider pre closure on PPF account in the event of emergency requiremments such as daughters own PPF Accounts who is to be married and parents account in the event of requirement of education/marriage or mediical treatment etc.
    May put a condition for minimum operTION OF ACCPUNT FOR A PERIOD OF 5 YEARS POR 8 YEARS OR SO.
    THIS SHOULD BE WITHOUT ENCUMBERANCE AND ON PRESENT SYSTEM POF TAX IMPLICATOM AS “EEE”
    ALOK AGRAWAL

  3. The Govt. may please also consider making a provision for increase in Interest Rate to 10% for Senior Citizens having age of 75+ years, provided they are not already receiving any Govt. Pension.

    My purpose of making this request if that slowly but steadily more and more aged parents are being forced to live alone due to their sons/daughters being in employment and the parents concerned being sick or frail and unable to do any domestic help in house of their sons/daughters and also in cases where the sons/daughters live abroad and old parents are either not welcome because of non-availability of servants abroad or parents themselves not being to willing to shift because of lack of social life abroad for such old persons.

  4. It would be interesting to know, whether premature closure would cost loss of (part of ) interest, like Term Deposits / Special Term Deposits of Banks, or the accrued interest will be paid fully till the date of closure ?

  5. I think keeping in tune with the inflation, the Ceiling on Sr. Citizen Deposit Scheme with Post Offices must be increased to account for escalation in Cost of Living.

  6. Govt. Should find if all companies, institutions are paying proper PPF. Whether proper rules are implemented. Is it considering or changing the basic salary or till date it was paying According to the PPF rules suddenly the contributions has come down from employers contribution and employees. By this employees will loose.. Are some institutions really paying their contribution or collecting from the employee only

  7. Hi,
    Iam Aged 38 years now, and three years back i had resigned from my services thinking that i will get a handful amount after serving 11 years in an institution but i got only a minimal amount as it was mandatory to leave our pension amount (which is 70% of the Employers share).
    I request the government to kindly allow peoples who are not interested to go for pension scheme as people like me have to wait for a very long time to get pension.

  8. Whether facility available to withdrawn or transfer to main SB account online amount by PPF account after five years?

  9. It is a pathetic rule in India because of all political leader enjoy tax free pension all Govt emplo5 get pension but a general purple how to relief from tax hidden. I think it should be WITHDRAWN immediately otherwise a great regulation face the govt. Immediately.
    I think govt. Should be take responsible for pension after 60 age all person like politicians

  10. SIR,
    I AM RETIRED PERSON HAVING AGE 67 YEARS. I WANT TO KNOW WHETHER I CAN PUT MY SAVINGS INTO PPF ACCOUNT. AND ALSO CAN AVAIL TAX BENEFIT UNDER SECTION 80C OF INCOME TAC ACT.
    THANKS AND REAGRDS

  11. Sir, is it possible to deposit more than 1.5 lacks in a financial year in a PPF account as after retirement a employee receive lot of money which he may not utilize fully and keep balance in a saving account with very less interest.

    1. The limit of Rs.1.50 Lacks is the limit of IT 80C Only,hence more amount can not be deposited. You can deposit in SCSS-15.00 Lacs and 7.50 Lacs at present in PM Pension through LIC which increased to 15,00 Lacs in this year(F.Year 2018-19) budget.
      Girish Chandra
      Aged 68 years & retired from PSU i.e BHEL

  12. People must be given an option for the closure at any time even after their retirement who have become senior citizen where some of them might need the full amount as an emergency.

  13. For minor account Grand father or Grand mother also need to be added along with father and mother under the definition of parents for all saving purposes and allowed income tax benefits under the relevant sections of Income tax Act including the sukanya samriddhi yojana.It will give appropriate relief to those minors whose fathers and mothers are not capable to look after their children and grand parents are unwilling to subsidise their son or daughter in laws due to various social stigma.

  14. I worked for Guardian Life care Pvt.,Ltd., I applied for PF final settlement , 6 months back, till today even after submitting every documents , not yet settled , EPFO Gurgaon. HR of Guardian says , it can also be processed
    without Aadhar. E.mail I D given by this office is not valid . any suggetions pls reply

  15. Government should allow closure and withdrawal of PPF for senior citizens if they
    wish to meet their urgent requirements like medical emergencies,day to day meeting
    Of expenses without any proof .

  16. Sir,
    I am a retired employee from Private Organisation. My age is 59 years now. I will be completing 60 years in January 2019. I receive a PF pension of Rs.2700/- only per month, which is not sufficient to lead life. My spouse is housewife. I wish to deposit my retirement benefits in PPF, MIS or Senior Citizen Time deposits. Therefore, the Govt. may please also consider making a provision for increase in Interest Rate to 12% maximum or 10% minimum per annum in respect of PPF and MIS/Senior citizen Time Deposits for Senior Citizens having age of 60 years, so that myself and my wife can lead normal life as long as we live. Government should also increase interest rates to 9% per annum for indian citizens below the age group of 60 years, so that they invest maximum amounts in government instead of investing in other sectors as a result Government will have sufficient money to develop India further. If interest rates are not attractive, people will not deposit in banks and post offices and with government.

    My purpose of making this request if that slowly but steadily more and more aged parents are being forced to live alone due to their sons/daughters being in employment and the parents concerned being sick or frail and unable to do any domestic help in house of their sons/daughters and also in cases where the sons/daughters live abroad and old parents are either not welcome because of non-availability of servants abroad or parents themselves not being to willing to shift because of lack of social life abroad for such old persons.

  17. It is incorrect to change ppf rate quarterly. Senior citizens should be given ppf rate of 8.5 or more. Also quarterly interest withdrawal facility should be provided for senior citizens.

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  19. For me and my wife our PPF account is major source of income for future after retirement. Can I withdraw all the amount from PPF and put it in Senior Citizen Scheme and other schemes which can give better returns ?

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