The central government on Thursday has withdrawn the revised interest rates on small savings schemes. After this, now the interest will be as much as January-March on PPF.
The central government has taken two big decisions in the last 24 hours regarding small savings schemes. On Wednesday evening, the government said that interest rates on these small savings schemes are being cut by up to 1.1 percent. The new rates have also been announced to be implemented from April 1. But, now the government has withdrawn this decision. Finance Minister Nirmala Sitharaman has given information about this by tweeting on Thursday morning. He wrote in the tweet that these small savings schemes with government guarantee will get the same amount of interest as the last quarter of the financial year 2021-22.
The government revises the interest rate every three months
After his announcement, those investing in these schemes have got a big relief. Most of the people who invest in these small savings schemes do not have to take any risk on their investment. Also, guaranteed returns are also received by the government on these schemes. The central government revises the interest rates of these schemes every quarter.
Now what is the rate of interest
After today’s announcement by the Finance Minister, now the interest rates on public provident funds have been 7.1 percent annually as before. In the information given on Wednesday, it was said that the annual interest rate on PPF for the April-June quarter will be 6.4 percent. But, now this decision has been withdrawn. The new rates have come into effect from today.
This is one such saving scheme of the central government, in which there is a benefit of tax exemption at three levels. Tax on PPF comes under the EEE category. In this long-term scheme, there is a benefit of tax exemption on investment every year. Also, no tax has to be paid on the maturity amount and the interest received on it.
1.It is compulsory to invest up to a minimum of 500 rupees in PPF. However, up to a maximum of Rs 1.5 lakh can be imposed. Compounding is also available on this scheme.
2.If a person does not deposit the amount of Rs 500 in this scheme in a financial year, then his account will be closed. However, later this account can be resumed by paying a penalty of 50 rupees for every default year.
3.The person who deposits in PPF also gets the facility of loan. A loan can be taken for the next financial year of the financial year in which the investment has been made in this scheme. However, certain terms and conditions have to be fulfilled regarding the loan.
4.The maturity period of this scheme is 15 years. After this it can be extended for 5-5 years. Apart from the year in which PPF account has been opened, withdrawal is also provided once in every financial year after 5 years.
5.Under the PPF rules, if the account holders die, their nominee or legal heirs cannot continue to deposit in this account. However, they get the full amount including the interest till just before the month of death.
