The Public Futures Fund (PPF) is a popular investment option among current taxpayers. This is because the PPF is still paying interest at 7.1 per cent. At the same time, the interest rate on Fixed Deposit (FD) is less than six percent. However, on the one hand the PPF account takes advantage of high interest and tax deduction, on the other hand, there are three losses to the account holder when the account becomes inactive before it expires. Tell us what the loss is when the PPF account is deactivated.
Account Idle Loss
1. In 2016, the government made a significant change in the PPF rules. In this, the government is allowed to close the PPF account before expiring under certain conditions. Situations that provide an account closing facility include the treatment of a fatal illness or the costs of a child’s education. However, the contributor can do so only after the PPF account has been up and running for five years. This facility is not available with a passive PAPF account.
2. The loan can be taken from the PPF account until the end of the sixth fiscal year after the third financial year. This facility is not available on a closed PPF account.
3. If the account holder wants to open a PPF account other than a closed PPF account, the rule does not allow it. No one person can have two PPF accounts. However, interest on the maturity period of the deposit in the passive account is also paid.
The main reason for the account to be active
According to experts, the main reason for account latency is not to invest even the minimum amount. It is mandatory to invest Rs.500 each year in a PPF account. For 15 years, investors must deposit at least this amount. Failure to do so will disable the account. At the same time, investors can take advantage of income tax exemption under Section 80C of the Income Tax by investing a maximum of Rs 1.5 lakh on an annual basis in a PPF account.
The fine is to be paid on an annual basis of Rs
To reopen a PPF account, you must go to an open bank or post office. Here you will need to fill out the form to re-open the account. After this you will have to pay the dues. This means that for every year you do not deposit, you have to pay at least 500 rupees each year. If you have not deposited for four years, you have to deposit 2000 rupees. 50 plus a fine of Rs.
