PPF Account- There are many facilities available on PPF account. In such a situation, if the account becomes inactive, then the loan facility and partial withdrawal also stops.
Public Provident Fund (PPF) is a major investment vehicle in India. Due to the excellent interest, tax savings and no risk of money sinking, people invest a lot of money in this scheme. Any Indian citizen can start investing in PPF with Rs 500 per annum. An amount of up to Rs 1.5 lakh can be deposited in a PPF account in a financial year.
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Tax exemption is available on investment in PPF under Section 80C. Apart from this, no tax is payable on interest income and the amount received at maturity. If the minimum amount of Rs 500 is not deposited in a financial year, the PPF account becomes inactive.
There are many facilities available on PPF account. In such a situation, if the account becomes inactive, then the loan facility and partial withdrawal also stop. If your PPF account is closed, then there is no need to panic. It can be easily reopened. PPF account is not only a safe investment, but it also provides many other benefits including tax savings and high interest rates. Therefore, make sure that your PPF account is not inactive and deposit the minimum amount in it every year.
Start the account like this
- Go to the bank or post office : First of all, go to the bank or post office where your PPF account is opened.
- Fill out the form : To reactivate the account, a form will need to be filled out.
- Deposit the outstanding amount: The outstanding amount for the years in which you have not deposited money will have to be paid.
- Paying a fine: A fine of Rs 50 will also have to be paid for each financial year.
How much will be the penalty?
Suppose your PPF account is inactive for 4 years, then you will have to deposit Rs 2000 (Rs 500 per year) for 4 years. Also, you will have to pay Rs 200 (Rs 50 per year) for four years.
The account can be closed before maturity.
In 2016, the government allowed premature closure of the account in certain circumstances such as life-threatening illness or child education expenses. However, this facility is available only after 5 years of investment.
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