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Public Provident Fund (PPF): FAQ

Can an Non Resident Indian (NRI) open a Public Provident Fund (PPF) account?

Yes, there is no objection to Non Residents Indians opening PPF accounts out of monies held in their non-resident account in Indian banks.

 

What is the process of PPF account transfer from a bank to a post office?

Read to know the process of PPF account transfer from a bank to a post office

The State Bank of India/its subsidiary will issue an Account Payee cheque or a demand draft for an outstation transfer. The Account Payee cheque will be in favor of the transferee post office with a certified copy of the ledger and other concerned original records, such as the application for opening the account, signature cards, and nomination forms.

 

The cheque/draft will be drawn by designation and will indicate that it relates to PPF account number 'so-and-so. On receipt of the PPF account-on-transfer along with the cheque or draft from the bank, a PPF account will be opened at the transferee post office. The process is similar to that of the opening of a new account. The transaction will not be included in the credit transfer journal but will be entered in the list of transactions like other new accounts opened by cash.

 

Do I have to contribute every year to my PPF account?

Yes. Your account will be defunct if you do not deposit the required minimum of Rs. 500 a year. The amounts already deposited will continue to earn interest, which will be paid to you at the end of the term (15 years), but you can't take loans or make withdrawals.

 

What happens to a PPF account in event of the depositor's death? If a PPF account holder dies and there is no nomination, who gets the deposited amount?

If the amount is up to Rs. 1 lakh, the accounts office will pay it to the legal heirs of the deceased on receipt of application in prescribed form, supported with necessary documents without production of succession certificate. If the balance is more than Rs. 1 lakh, it is necessary to produce a succession certificate.

 

 

For how many years can a PPF account be extended beyond its initial 15 years of operation?

After the PPF account has been in operation for 15 years, it can be extended for five years at a time. There is no limit on the number of such extensions.

 

Can a PPF account be transferred from one branch of a bank to another branch, or one post office to another post office? What is the process?

Yes, a PPF account can be transferred from one branch of a bank to another branch, or from one post office to another. Just fill in the PPF account transfer forms available with the postmaster or the bank.

 

Can NRIs who wish to avail of tax benefit in India consider opening a Public Provident Fund (PPF) account?

NRIs who wish to avail of rebate on their income in India are also eligible to open a PPF account. Subscriptions, however, will have to be made from their NRO account on a non-repatriable basis.

 

What is the maximum tenure for a PPF account?

The maximum operating tenure for a PPF account is 15 years.

 

Can I claim tax benefits on my PPF account?

The interest credited to your account, as well as withdrawals from it, are exempt from income tax. The balance held is fully exempt from wealth tax, without any limit.

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