Public Provident Fund Rules: Many reforms and changes in the rules of Public Provident Fund by the Central Government.
The Central Government has notified the new rules, making a major change in the rules of Public Provident Fund (PPF). Under the new rule, the amount deposited in PPF account will no longer be attached. This new rule has been called “Public Provident Fund Scheme, 2020” which has been implemented with immediate effect.
Under the new rules Public Provident Fund Scheme, 2019, if the PPF account holder defaults any loan, then the amount deposited in his PPF account cannot be attached under any court order or decree.
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Public provident fund scheme 2020
Under this new rule, the amount deposited in PPF account will no longer be attached. Apart from this, the Central Government has made many other reforms and changes in the rules of Public Provident Fund. Currently PPF has a lock-in period of 15 years but the new rules provide for depositing funds in PPF account even after the maturity period.
The account holder can continue to deposit the amount in his account for up to 5 years even after the maturity period of 15 years from the date of opening the account. Apart from this, despite PPF investments being locked for 15 years, it has the facility of premature withdrawal during the financial crisis which allows withdrawal of funds from the account 5 years after opening the account. The account holder will also be able to withdraw up to 50 percent of the amount from his account in the fourth year.
Features and benefits of PPF
Any person can open PPF account through Form-1. PPF account can also be opened as a guardian for a person with minor or malformed brain. A minimum of Rs 500 and a maximum of Rs 1.5 lakh can be deposited in a PPF account during a financial year.
Interest is paid on PPF account as per the rate fixed by the government. There is also the benefit of tax deduction on depositing the amount in PPF account. The PPF holder can also get a loan in lieu of his PPF investment to meet any financial need. The government reviews the interest rate of PPF every three months and currently it is getting interest at the rate of 7.9% per annum.
