PPF News: Public Provident Fund (PPF) is a great investment scheme. Not only is tax exemption available under Section 80C on the money invested in this, tax is also not to be paid on the interest income and the amount received on maturity. A minimum of Rs 500 has to be deposited every year in the PPF account. If Rs 500 is not deposited in a financial year then the PPF account becomes inactive.
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When the account is inactive, the PPF account holder does not get many benefits. If due to some reason the PPF account has been deactivated then there is no need to worry. Closed PPF account can be activated easily. For this, some fine has to be paid and some paperwork has to be done. Well, it is right that you keep depositing Rs 500 in the PPF account every financial year so that it does not get closed.
To get your PPF account reactivated like this, you will have to go to the branch of the bank or post office where you have your account. This work is not done online. To activate an inactive account, you will have to fill a form. In the years in which you have not invested in it, you will have to pay the arrear amount and will also have to pay a penalty of Rs 50 per year.
Calculate like this:
In the case of PPF, the penalty and arrears mathematics is not very complicated. Suppose your PPF account has been closed for 4 years. So you will have to pay arrears of Rs 2000 for four years. Along with this, you will have to pay a penalty of Rs 200 at the rate of Rs 50 per year.
When can the account be closed before maturity?
In 2016, the government has given permission to close the PPF account before maturity in certain special circumstances. These situations include expenses for the treatment of a life-threatening illness or the education of a child. The investor can do this only after the PPF account is operational for five years. Apart from this, loan can be taken against the balance in the PPF account after the third financial year till the end of the sixth financial year. This benefit is not available in inactive PPF account.
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