PPF Account: Nowadays, everyone wants to invest in a place that offers security and excellent returns. If you’re looking for such an investment scheme, the government’s PPF scheme can be very beneficial. The PPF scheme is very popular among the public. It offers tax benefits under Section 80C. It is a Triple E category investment, meaning the interest earned is tax-free, and the maturity proceeds are also tax-free. Therefore, it is considered the best option for tax savings.
Many times, for some reason, we forget to make the minimum annual deposit into our PPF account, leaving our PPF account inactive. If your PPF account has been discontinued, there’s no need to worry; it can be revived. Let’s learn how to reactivate your PPF account. What are the penalty rules for this?
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Why does a PPF account get closed?
The most common reason for PPF account closure is not making the minimum annual deposit. To keep a PPF account active, it is essential to deposit at least ₹500 every financial year. If you fail to make the minimum deposit in any financial year, your account is closed.
Why is it important to revive a PPF account?
Even if a PPF account is closed, interest continues to accrue. However, it is important to revive it because the loan facility available on it cannot be availed of. This allows you to use this facility after the account is closed. If your account remains closed and you do not revive it, you will receive only your deposit amount and interest on it upon maturity. However, after reviving it, you can renew the account with all the benefits. A PPF account allows you to fully avail of the tax benefits under Section 80C. Reviving a PPF account is a straightforward process; you’ll need to follow these steps.
Follow these steps
First, you’ll need to visit your bank branch or post office where your PPF account is open. Fill out an application form for PPF account revival. You’ll find this form at the bank or post office. In this form, you’ll need to fill out your account details, penalty details, and other minimum deposit information. You’ll need to make a minimum deposit of ₹500 per year for the remaining three years. If the PPF account remains closed for three years, you’ll need to deposit ₹1,500.
After the minimum deposit, you’ll need to pay a penalty of ₹50 per year. If the account remains closed for three years, you’ll need to pay ₹150. This will bring your total to ₹1,650. You can deposit this amount by cash or cheque. Along with the application form and payment slip, you’ll also need to submit some other necessary documents: your PPF passbook, identity proof, a copy of your address, etc. After the process is complete, be sure to update your PPF passbook to reflect the new status and the amount deposited.