PPF New Rules 2020: 5 Latest Rules That You Must Know

PPF New Rules 2020: The Department of Ministry of Communication has recently made the amendments to procedural rules related to the Public Provident Fund (PPF) scheme. The changes will mainly reflect in the post office savings bank manual governing the rules of PPF and other National Savings Schemes.

The Public Provident Fund Act, 1968 stands reversed and along with the Government Savings Certificates Act, 1959 they now come under the Government Savings Promotion Act 1873.

1. PPF Contribution Rules

The PPF minimum and the maximum amount to be deposited remains the same; the minimum amount to open PPF account has changed along with the number of times contributions can be deposited into the PPF account.

Anyone can subscribe to the Public Pension Fund in their name or on behalf of a minor's guardian of any amount in multiples of Rs. 50 not less than Rs. 500 and not more than Rs. 1.5 lakh in a financial year. Also, PPF subscriptions can be deposited in a lump sum or instalments of even more than one instalment in a month. Previously, the PPF subscription had to be in multiples of Rs.5 and could be paid into the account in a lump sum or in instalments that did not exceed twelve in a year.

To open a PPF account, one must complete and submit Form 1 instead of the Form A previously used.

2. PPF Extension Rules After Maturity – With Deposits

After 15 years, PPF Account can be extended after maturity with deposits within one year of the of date of maturity original PPF Account, or it can be extended by applying Form-4, instead of Form H used earlier.

3. PPF Extension Rules After Maturity – Without Deposits

Similarly, PPF Account can also be retained after maturity without further deposits and balance at the time of maturity shall continue to earn interest at the rate notified from time to time. In case PPF Account is retained without deposits, the account holder can make one withdrawal in each financial year.

4. PPF Loan Interest Rate

The subscriber will repay the principal amount of loan through pay-in-slip, and it will be credited to the Loan Account of the subscriber. After the principal amount is fully refunded, the subscriber shall pay interest in not more than two monthly instalments at the rate of 1 per cent per annum of the principal for the period commencing from the first day of the month following the month in which the loan is drawn up to the last day of the month in which the previous instalment of the loan is repaid. If the loan is not refunded or is reimbursed only in part, the penal interest will be charged at the rate of 6 per cent per annum.

5. PPF- Calculating Interest

To get interest amount for the entire month, it is suggested to deposit PPF contribution on or before 5th of the month. If you want to use PPF interest rate calculator, remember that the interest on subscriptions will be eligible for a calendar month on the lowest balance at the credit of an account between the close of the 5th day and the end of the month. The interest on the subscriptions made during the financial year and balance in the account will be at rates from time to time by the central Government. It will be credited to the account of the subscriber at the end of each financial year. The interest will be calculated on 31't March day end and credited into the account on April