Public Provident Fund or PPF account is among the excessive yielding (at present, PPF rate of interest is 7.21 per cent) small saving schemes backed by the Government of India (GoI). It has a maturity interval of 15 years however in sure instances, an account holder can shut one’s account earlier than maturity interval as nicely. The PPF withdrawal rule says {that a} PPF account holder can shut the account topic to success of sure phrases and situations, offered the account has accomplished 5 full monetary years.
Speaking on the phrases situations for PPF account closure earlier than 15 years Mumbai-based tax and funding skilled Balwant Jain mentioned, “PPF account holder can withdraw complete amount if the account holder, its life partner or any of the dependents (parents or children) faces life threatening disease. The PPF account closure is also allowed in case the account holder needs money for higher studies for himself or for its children.” Jain went on so as to add that one can shut PPF account in case of residential standing change additionally.
Highlighting upon the PPF rate of interest relevant within the case of pre-mature PPf account closure; SEBI registered tax and funding skilled Jitendra Solanki mentioned, “In case of pre-mature PPF account closure, one will get 1 per cent lesser PPF interest rate on one’s money and pre-mature PPF account closure is allowed only when the PPF account has completed five complete financial years. Means, if a PPF account has been opened on 1st June 2020, then pre-mature closure is allowed only from 1st April 2026 after completion of five full financial year of FY 2021-22, FY 2022-23, FY 2023-24, FY 2024-25 and FY 2025-26.” However, within the case of demise of the PPF account holder, the nominee is allowed for 100 per cent PPF withdrawal even when the account is lower than 5 yr outdated.
So, listed here are the 4 situations when PPF account will be closed earlier than maturity:
1] Death of the PPF account holder;
2] Change of residential handle of the PPF account holder;
3] In case of life threatening illness to the PPF account holder, life companion of the account holder or any of the dependents of the account holder; and
4] For increased research of PPF account holder or its kids;
However, barring first situation, relaxation 3 situations are relevant solely when the PPF account has account has accomplished 5 full monetary years.
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