New PPF interest rates: what is the latest PPF interest rate?

The government kept interest rates on small savings schemes such as the PPF unchanged. This means that for the quarter ending September 30, 2022, the PPF will earn an interest rate of 7.1%.

The Public Provident Fund (PPF) scheme, established under the Public Provident Fund Act 1968, is a long-term investment scheme approved by the Government of India. It offers security with attractive interest rates and fully tax-free returns.

Fiscal advantages

PPF interest income is fully exempt from income tax. The balance of a PPF account is entirely exempt from ISF.

PPF loan facility or partial withdrawal

After the fifth year, withdrawals are permitted each subsequent year. The maximum withdrawal is 50% of the account balance at the end of the fourth year immediately preceding the year of withdrawal, or at the end of the previous year, whichever is less, less outstanding borrowings than he could have contracted.

During the third fiscal year following the fiscal year in which the account was opened, the depositor is eligible for a loan. At the end of the first financial year, the credit balance of the account can represent up to 25% of the total amount that can be borrowed. The loan must be repaid in 36 months.

PPF Features

HUFs and non-resident Indians are not eligible to open PPF accounts. A lump sum payment or 12 monthly installments are both acceptable for subscriptions with a minimum of Rs. 500 and a maximum of Rs. 1,50,000. The account has a term of 15 years, but may be extended by one or more five-year installments without incurring loss of interest upon written request made within one year of the account’s maturity date.

Nomination

A PPF holder may propose one or more candidate names. The percentage share of each candidate, which must equal 100% if the person wishes to nominate more than one person, must be indicated. Also, if a minor’s name was used to open the account, there is no opportunity for nomination.

When is a PPF account treated as abandoned?

If clients fail to pay the required minimum of Rs. 500 in any given fiscal year, their account will be deemed abandoned. In these situations, unless the account is reactivated, the subscriber will not be allowed to take out a loan or make a partial withdrawal. Subscriber is only permitted to have one PPF account open at a time.

According to the , “A subscriber of an abandoned account can reactivate the abandoned account by paying Rs. 50/- as fine for each year of default along with subscription of arrears of Rs. 500/- for each year.

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