Public Provident Fund (PPF) is a long-term savings scheme of the Government of India. The maturity period of PPF savings scheme is 15 years, but if your PPF account has been inactive for some time, you can reactivate it after following the prescribed procedure. To reactivate an inactive PPF account, the account holder has to make a written request to the bank or post office along with depositing Rs 500 for each year the account remained inactive. Also, a penalty of Rs 50 is levied for each year of inactivity.
Why PPF account becomes inactive
According to the investment rules of Public Provident Fund, the account holder in PPF must deposit at least Rs 500 in a year. When the customer does not deposit even this minimum amount in that year, the PPF account is included in the inactive category. That is, your PPF account is no longer active. If your PPF account has been inactive for more than a financial year, then the bank or post office will charge you a penalty of Rs 50 to revive it.
Understand the scheme
Public Provident Fund (PPF) is a popular fixed-income investment option among investors. Individuals can invest up to Rs 1.5 lakh in a PPF account every year and also get tax deduction under Section 80C of the Income Tax Act. The maturity period of the account is 15 years and the account holder has to deposit at least Rs 500 every financial year. The loan facility in this scheme is available from the third financial year to the sixth financial year. Withdrawal is allowed every year from the seventh financial year.
Even after maturity, the PPF account can be extended for any number of blocks of 5 years with additional deposits. The amount deposited is eligible for deduction under section 80-C of the Income Tax Act.
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