The Public Provident Fund (PPF) is a favoured savings instrument for many Indians,
thanks to its tax benefits and secure nature. However, when it comes to Non-Resident Indians (NRIs) and PPF, there’s a cloud of misconceptions that often leads to confusion. Let’s debunk some of these myths:

• Misconception: Many believe that NRIs are not allowed to open new PPF
  accounts.
• Reality: NRIs cannot open a new PPF account. However, if they had a PPF
  account before becoming an NRI, they could continue to maintain it until maturity.

1. PPF Accounts of NRIs Get Closed Automatically:

• Misconception: Once an individual becomes an NRI, their PPF account is
  automatically closed.
• Reality: The PPF account does not close automatically. It remains operational
  until maturity but operates with certain restrictions.

1. NRIs Can Continue to Invest in Existing PPF Accounts:

• Misconception: NRIs can keep investing in their existing PPF accounts without
  any issues.
• Reality: While the account remains active, NRIs cannot make fresh contributions
  to their PPF account once they attain NRI status.

1. PPF Withdrawals are Taxable for NRIs:

• Misconception: The amount withdrawn from PPF by NRIs is taxable.
• Reality: PPF withdrawals remain tax-free in India, irrespective of one’s residential
  status. However, NRIs should check the tax implications in their country of
  residence.

1. NRIs Can Extend Their PPF Account Beyond Maturity:

• Misconception: Like resident Indians, NRIs can also extend their PPF accounts
  beyond the 15-year maturity period.
• Reality: NRIs cannot extend their PPF accounts. Once the account matures, they
  must withdraw the entire amount.

PPF Interest Rates are Different for NRIs:

Misconception: NRIs receive a different (often believed to be lower) interest rate on their PPF accounts.

Reality: The interest rate for PPF is the same for both residents and NRIs. It’s set by the Indian government and is subject to periodic revisions.

Frequently Asked Questions (FAQs) about PPF for NRIs

Q1. Can NRIs open a new PPF account in India?
No, NRIs cannot open a new PPF account. However, if they had one before becoming an NRI, they can continue to maintain it.

Q2. What happens to my existing PPF account if I become an NRI?
You can continue to maintain your existing PPF account until its maturity. However, you cannot extend it beyond the maturity period.

Q3. Are the PPF returns for NRIs taxable in their country of residence?
Tax implications vary by country. It’s advisable to consult a local tax expert regarding the tax treatment of PPF returns in your country of residence.

Q4. Can NRIs withdraw from their PPF account?
Yes, NRIs can make withdrawals, subject to the standard PPF withdrawal rules.

Q5. Is the interest earned on PPF accounts tax-free for NRIs in India?
Yes, the interest earned is tax-free in India, but it’s essential to check the tax implications in the NRI’s country of residence.

Q6. Can NRIs deposit in their PPF account from their NRE or NRO account?
Yes, NRIs can deposit in their PPF account from their NRO account. However, deposits from NRE accounts are not allowed.

Q7. What is the current interest rate on PPF for NRIs?
The interest rate for NRIs is the same as for resident Indians and is revised quarterly.

Q8. Can NRIs extend their PPF account after maturity?

No, NRIs cannot extend their PPF account after maturity, even if it was opened before they attained NRI status.

Q9. Is there a penalty for not depositing the minimum amount in the PPF account?
Yes, a nominal penalty is charged if you don’t deposit the minimum required amount
in a financial year.

Q10. Can NRIs take a loan against their PPF account?
Yes, NRIs can avail loans against their PPF account, subject to the standard PPF
loan provisions.

Q11. How is the interest on PPF calculated for NRIs?
The interest calculation for NRIs is the same as for resident Indians, calculated monthly and credited annually.

Q12. Can I transfer my PPF account to another branch or bank?
Yes, PPF accounts can be transferred between branches or banks.

Q13. Do NRIs need to change the status of their PPF account after becoming an NRI?
No, there’s no need to change the account status. However, certain features and
benefits might be restricted.

Q14. Is a nomination facility available for NRI’s PPF account?
Yes, NRIs can nominate beneficiaries for their PPF account.

Q15. What happens to the PPF account if the account holder passes away?
The balance in the PPF account is paid to the nominee or the legal heir.

Q16. Can two NRIs jointly open a PPF account?
No, joint accounts are not allowed in PPF, whether for residents or NRIs.

Q17. Is the maturity amount from PPF repatriable for NRIs?
The maturity amount can be credited to the NRO account of the NRI, from which
repatriation is subject to certain conditions.

Q18. Can I change the nomination for my PPF account after becoming an NRI?

Yes, you can change the nomination for your PPF account anytime.

Q19. Are there any restrictions on deposit amounts for NRI PPF accounts?

The deposit limits for NRIs are the same as for resident Indians, with a minimum of INR 500 and a maximum of INR 1.5 lakhs in a financial year.

Q20. Can I convert my regular PPF account to an NRI PPF account?

There’s no separate NRI PPF account. If you had a PPF account before becoming an NRI, you could continue it till maturity but with certain restrictions.Rules Governing PPF Accounts for NRIs

The Public Provident Fund (PPF) has long been a popular savings instrument in India, offering attractive interest rates and tax benefits. However, for Non-Resident Indians (NRIs), the rules surrounding PPF accounts have undergone changes, making it essential to be updated. Here’s a comprehensive look at the regulations governing PPF accounts for NRIs:

Account Opening: NRIs ARE not allowed to open A new PPF account. However, if an individual had opened a PPF account while they were a resident of India and later changed their status to NRI, the account could be continued until its maturity.

Account Tenure: The standard PPF account has a tenure of 15 years. For NRIs who had opened their PPF account before becoming an NRI, they can’t extend the account beyond this tenure. Once matured, the funds remain locked and earn interest, but additional contributions aren’t allowed.

Interest Rate: The interest rate for NRIs on PPF accounts is the same as that for resident Indians. It’s set quarterly by the Government of India. However, it’s worth noting that once a person’s status changes to NRI, the interest earned becomes taxable in many foreign countries, depending on the Double Taxation Avoidance Agreement (DTAA).

For example, Raj, who moved to Australia, might have to pay tax in Australia on the interest he earns from his PPF account in India, based on the DTAA between India and Australia.

Contribution Limits: The annual contribution limit for PPF accounts is INR 1.5 lakhs. This limit applies to both residents and NRIs. However, NRIs can’t operate the account or make contributions if the account has matured after 15 years.

Repatriation: The principal amount and interest in the PPF account are fully repatriable for NRIs. However, the process might require additional documentation to prove the change in residency status.

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No. 112-08/2018-SB
Government of India
Ministry of Communications
Department of Posts
(FS Division)

Dak Bhawan New Delhi-110001
Dated: 07.12.2020

To,
All Head of Circles

Sub: Introduction of the system of “Drop box” for depositing cheques in post offices. -reg.

Respected Sir/Madam.

Kindly refer to this Division’s D.O.No. 112-08/2018-SB dated 13.09.2018 regarding Drop Box system in post offices for cheque deposit.

In this regard, the undersigned is directed to request you to start the “Drop Box” system for cheque deposit in post offices chosen for the purpose by the circle.

Following guidelines may be followed for smooth operation of “Drop Box” facility :

1. Drop Box facility should be provided in the Public Hall for easy access to public.
2. The following instruction for dropping cheques should be placed besides the drop box.

• A. Please drop the cheque with filled pay-in slip (SB-103) duly filled in all respects.
• B. Please correct Account Number, also write cheque number, bank name in the pay-in-slip.
• C. Please write contact number on the back side of pay-in-slip and cheque.
• D. For Cheque amounting 50000 or more, PAN card no. should be mentioned in pay-in-slip.
• E. For Cheque of PPF/SSA scheme please check your prescribed limit for financial year.
• F. For cheque of PPF/SSA account for matured account should be extended first for depositing cheque.
• G. Post dated and outdated cheque should not be dropped in the drop box.
• H. Non-CTS cheques should not be dropped in the drop box.
• I. Cheque for opening of New Accounts should not be dropped in drop box.

3. Drop Box opening timings may be fixed with reference to cheque clearance hours in the circle/Post Office.

4. Concerned PA should collect the cheques from the drop box twice in a day at fixed timing, make a list of the cheques & then handover respective counters for depositing/making entries.

5. Proper Supervision to be made by the concerned supervisor on this to avoid any discrepancy or irregularity.

6. In case of any discrepancy noticed, depositor should be intimated through phone/ letter for completion of requsite details.

This issues with the approval of DDG(FS).

Yours Faithfully

(Devendra sharma)
Assistant Director (SB-II)

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PPF Scheme 2019

NOTIFICATION

New Delhi, the 12th December, 2019

G.S.R. 915(E).- In exercise of the powers conferred by section 3A of the Government Savings Promotion Act, 1873 (5 of 1873), the Central Government hereby makes the following Scheme, namely:-

1. Short title and commencement.-

(1) This Scheme may be called the Public Provident Fund Scheme, 2019.

(2) It shall come into force on the date of its publication in the Official Gazette.

2. Definitions.-

(1) In this Scheme, unless the context otherwise requires,-

(a) “account” means an account under this scheme;

(b) “account holder” means an individual in whose name the account is held;

(c) “Act” means the Government Savings Promotion Act, 1873 (5 of 1873);

(d) “Form” means forms appended to this Scheme;

(e) “General Rules” means the Government Savings Promotion General Rules, 2018;

(f) “year” means the financial year.

(2) Words and expressions used herein but not defined shall have the meanings respectively assigned to them in the Act and in the General Rules.

3. Limits of number of accounts.-

(1) An individual may open an account by making an application in Form-1.

(2) An individual may also open one account on behalf of each minor or a person of unsound mind of whom he is the guardian:

Provided that only one account shall be opened in the name of a minor or a person of unsound mind by any of the guardian.

(3) Joint account shall not be opened under this Scheme.

4. Limits of subscription.-

(1) A deposit which shall not be less than five hundred rupees and not more than one lakh fifty thousand rupees in multiple of fifty rupees may be made in an account in a year.

(2) Maximum limit of one lakh fifty thousand rupees as specified in sub-paragraph (1) by an individual shall be inclusive of the deposits made in his own account and in the account opened on behalf of the minor.

5. Manner of making deposit.-

(1) The account shall be opened with a minimum initial deposit of five hundred rupees and thereafter deposit of any sum in multiples of fifty rupees shall be made.

(2) The deposit in the account subject to the limits mentioned in paragraph 4 may be made in the account in one lump sum or in instalments.

6. Discontinuation of account.-

(1) Any account in which the account holder, having deposited five hundred rupees in the initial year, fails to deposit the minimum amount in the following years, shall be treated as discontinued.

(2) An account treated as discontinued under sub-paragraph (1), may be revived during its maturity period on payment of a fee of fifty rupees along with arrears of minimum deposit of five hundred rupees for each year of default:

Provided that the balance in a discontinued account not revived by the account holder before its maturity shall continue to earn interest at the rate applicable to the Scheme from time to time.

(3) The account holder of a discontinued account shall not be eligible to open a new account before closure of such discontinued account after maturity:
Provided that the facility of loan and partial withdrawal shall not be allowed in such an account and the account holder shall be prohibited from opening another account in his name under this Scheme till final closure of such account.

(4) Facility of loan and partial withdrawal shall be allowed to regular accounts only as per the provisions of this Scheme.

(5) The total deposit in a year as specified in paragraph 4, shall be inclusive of deposits made in respect of years of default of the preceding years but excluding the default fee.

7. Interest.-

(1) Interest at 7.9 per cent. per annum shall be eligible for a calendar month on the lowest balance at the credit of an account between the close of the fifth day and the end of the month.

(2) Interest shall be credited to the account at the end of each year.

(3) Interest shall be credited at the end of the year irrespective of the change of the account office due to transfer of the account during the year.

8. Loans.-

(1) At any time after the expiry of one year from the end of the year in which the initial subscription was made but before expiry of five years from the end of the year in which the initial subscription was made, the account holder may, apply in Form-2, to the accounts office for obtaining a loan consisting of a sum of whole rupees not exceeding twenty-five per cent. of the amount that stood to his credit at the end of the second year immediately preceding the year in which the loan is applied for.

(2) In case of an account opened on behalf of a minor or a person of unsound mind, the guardian may apply for the loan for the benefit of the minor or the person of unsound mind by submitting the following certificate to the accounts office, namely:-

“Certified that the amount sought to be withdrawn is required for the use and welfare of Shri/ Smt./ Master/ Kumari ……. who is a minor/ a person of unsound mind/ a person incapable of operating his account due to physical infirmity and is alive on this ……. the day of ……. (month), ……….(year).”

(3) An account holder shall not be entitled to get a fresh loan so long as earlier loan has not been repaid in full together with interest thereon.

(4) An account holder shall be entitled for only one loan in a year.

9. Repayment of loan and interest.-

(1) The principal amount of a loan shall be repaid by the account holder before the expiry of thirty-six months from the first day of the month following the month in which the loan is sanctioned:

Provided that the repayment may be made either in one lump sum or in instalments.

(2) After the principal amount of the loan is fully repaid, the account holder shall pay interest thereon in not more than two monthly instalments at the rate of one 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 upto the last day of the month in which the last instalment of the loan is repaid:

Provided that where the loan is not repaid, or is repaid only in part, within a period of thirty-six months, interest on the amount of loan outstanding shall be charged at six per cent. per annum instead of at one per cent. per annum with effect from the first day of the month following the month in which the loan was obtained, to the last day of the month in which the loan is finally repaid.

32 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II -SEC. 3(i)]

(3) The interest on the amount of loan outstanding under the proviso to sub-paragraph (2) and any portion of interest payable, but not paid, on any loan, the principal amount of which has already been repaid within the period of thirty-six months, may, on becoming due, be debited to the holder’s account.

(4) The interest recoverable shall accrue to the Central Government.

(5) The interest on outstanding loans which are not paid before the expiry of thirty-six months or paid partly shall be debited to the holder’s account at the end of each year.

(6) In case of death of the account holder, the nominee or legal heir shall be liable to pay interest on the loan availed by the account holder but not repaid before his death. Such amount of due interest shall be adjusted at the time of final closure of the account.

10. Withdrawal from account.-

(1) Any time after the expiry of five years from the end of the year in which the account was opened, the account holder may, avail withdrawal by applying in Form-2, from the balance to his credit, an amount not exceeding fifty per cent. of the amount that stood to his credit at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower:

Provided that the amount of loan outstanding, if any, along with interest shall be paid by the account holder before availing the facility of withdrawal under this paragraph:

Provided further that the facility of withdrawal may be availed only once in a year only from the accounts which have not become discontinued.

(2) In case of an account opened on behalf of a minor, or a person of unsound mind, the guardian may apply for the withdrawal for the benefit of the minor or a person of unsound mind by submitting the following certificate to the accounts office, namely:-

“Certified that the amount sought to be withdrawn is required for the use and welfare of Shri/Smt./Master/ Kumari……………………………. who is a minor/ a person of unsound mind/ a person incapable of operating his account due to physical infirmity and is alive on this……the day of…………..(month), ……….(year).”.

11. Closure of account or continuation of account without deposits after maturity.-

(1) Any time after the expiry of fifteen years from the end of the year in which the account was opened, the account holder may apply in Form-3 to the accounts office for the closure of his account. The accounts office shall allow the withdrawal of the entire balance along with due interest up to the last day of the month preceding the month in which the account is closed.

(2) The account holder may retain his account after maturity without making any further deposits for any period and the balance in the account will continue to earn interest at the rate applicable to the Scheme:

Provided that the account holder may make one withdrawal, in each year, of any amount within the balance.

(3) Once the account is continued without deposits for more than a year, the account holder shall not have the option again to continue the account with deposits.

12. Extension of account with deposits after maturity.-

(1) Subject to the provisions of paragraph 11, the account holder on the expiry of fifteen years from the end of the year in which the account was opened, may extend his account and continue to make deposit under paragraph 4 for a further block period of five years by applying to the accounts office in Form-4.

(2) The option of extension of account under sub-paragraph (1) shall be made by the account holder before expiry of one year from the maturity of the account:

Provided that an account opened on behalf of a minor or a person of unsound mind may be extended at the request of the guardian.

(3) No deposits can be made in the account, if the account holder fails to give his option to continue the account within one year from the date of maturity. Any deposit made in such account shall be treated as irregular and refunded by the accounts office immediately without any interest:

Provided that the balance in the account on the date of maturity shall continue to earn interest upto the end of the month preceeding the month of closure.

(4) Facility of partial withdrawal under paragraph 10 of the Scheme shall be available to the account extended under sub-paragraph (1), subject to the condition that the total withdrawal during the block period of five years shall not exceed sixty per cent. of the balance at credit at the commencement of the block period:

Provided that the withdrawal, subject to the ceiling as specified above may be made either in a single or in yearly instalments.

(5) Provisions of sub-paragraphs (1) to (4) shall also apply on accounts after maturity on expiry of the each extended block period of five years.

(6) If the account is continued with deposits for one or more five block periods, the account holder may leave the account without deposits on completion of any block period and the account shall continue to earn interest till it is closed and the account holder may make one withdrawal every year from the account.

(7) An account holder who has given his option for the extension of the account for a period of five years shall not have the option to withdraw his request at a later stage.

13. Premature closure of account.-

(1) An account holder shall be allowed premature closure of his account or the account of a minor or person of unsound mind of whom is the guardian on an application to the accounts office in Form-5, on any of the following grounds, namely:-

(a) treatment of life threatening disease of the account holder, his spouse or dependent children or parents, on production of supporting documents and medical reports confirming such disease from treating medical authority;

(b) higher education of the account holder, or dependent children on production of documents and fee bills in confirmation of admission in a recognised institute of higher education in India or abroad;

(c) on change in residency status of the account holder on production of copy of Passport and visa or Income- tax return:

Provided that an account under this Scheme shall not be closed before the expiry of five years from the end of the year in which the account was opened:

Provided further that on such premature closure, interest in the account shall be allowed at a rate which shall be lower by one per cent. than the rate at which interest has been credited in the account from time to time since the date of opening of the account, or the date of extension of the account, as the case may be.

14. Closure of account on death of the account holder.-

(1) In the event of the death of the account holder, the account shall be closed and the nominee or the legal heir shall not be allowed to continue the account.

(2) The balance in the account of the deceased account holder shall earn interest till the end of the month preceeding the month in which the eligible balance is paid to the nominee or the legal heir, as the case may be.

15. Protection of credit balance from attachment.–

Amount standing to the credit of any account holder shall not be liable to attachment under any order or decree of any court in respect of any debt or liability incurred by the account holder.

16. Application of General Rules.-

Provisions of the General Rules shall, so far as may be, apply in relation to the matters for which no provisions have been made in this Scheme.

17. Power to relax.-

Where the Central Government is satisfied that the operation of any of the provisions of this Scheme causes undue hardship to an account holder, it may, by order for reasons to be recorded in writing, relax the requirements of that provision or provisions in a manner not inconsistent with the provisions of the Act.

[F. No. 2/2/2018-NS (Pt. I)]
RAJAT KUMAR MISHRA, Jt. Secy

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No. F.No. 113-01/2011-SB
Government of India
Ministry of Communications & IT
Department of Posts

Dak Bhawan, Sansad Marg,
New Delhi-110001, Dated: 21.08.2014

To
All Heads of Circles/Regions
Addl. Director General, APS, New Delhi.

Subject:- Revision of maximum limit of subscription in a financial year of PPF Account.

Sir / Madam,

The undersigned is directed to convey the decision of the Min. of Finance (DEA) for revision of existing maximum limit of subscription in a financial year in the existing PPF accounts as well as new PPF account to be opened on or after 13.08.2014. Now the subscription in a financial year shall be Rs 1,50,000/- in “place of Rs 1,00,000/- in PPF accounts. The copy of Gazette Notification No. G.S.R. 588 (E) dated 13.08.2014 issued by MOP (DEA) is enclosed.

2. it is requested to circulate this instruction to all field units and ensure that the instruction is strictly followed.

3. This issues with the approval of Competent Authority.

Read/download: Notification

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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

Government of India
Ministry of Finance
(Department of Economic Affairs)

Notification

New Delhi, the 13th August, 2014.

G.S.R. (E). – In exercise of the powers conferred by sub-section (4) of Section 3 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government hereby makes the following further amendments to the Public Provident Fund Scheme, 1968, namely :-

1. (1) This Scheme may be called the Public Provident Fund (Amendment) Scheme, 2014.

(2) It shall come into force from the date of its publication in the Official Gazette.

2. In the Public Provident Fund Scheme, 1968, –

(i) in paragraph 3, in sub-paragraph (1), for the letters and figures “Rs. 1,00,000”, the letters and figures “Rs. 1,50,000” shall be substituted;

(ii) In Form-A, in paragraph (iv), for the letters and figures “Rs. 1,00,000”, the letters and figures “Rs. 1,50,000” shall be substituted.

[F.No. 1/2/2014-NS.II]

(DR.RAJAT BHARGAVA)
JOINT SECRETARY TO THE GOVERNMENT OF INDIA

Source: www.finmin.nic.in
[http://finmin.nic.in/the_ministry/dept_eco_affairs/budget/PPF_amendment_scheme2014.pdf]

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