If you have a Public Provident Fund (PPF) account, it’s crucial to check its status today. Failure to do so might result in financial losses.
PPF is an excellent investment option, particularly for securing the future needs of your children or family.
Operated under the government, it currently offers an attractive annual interest rate of 7.1 percent, reviewed quarterly by the Finance Ministry.
Additionally, investing in PPF allows you to save tax on annual income up to Rs 1.5 lakh under Section 80C.
Key Rules for PPF Accounts: Protect Your Investment
After opening your PPF account, remember to deposit a minimum of Rs 500 every year for as long as your account remains open.
Additionally, you must deposit Rs 500 or more for the current financial year. Failure to do so results in a penalty of Rs 50 for each year without a deposit.
Act Promptly: Deposit Annually to Avoid Inactivity
It’s advisable to deposit money into your PPF account every year. In case you miss a payment, you have the option to deposit the amount and reactivate the account.
To reopen a closed PPF account, submit a written application to the relevant authorities.
Consequences of Inactivity: Understand the Drawbacks
While your PPF account remains inactive, it accrues interest, but this comes with disadvantages. You lose the ability to take a loan against the PPF account, and restarting it incurs fines.
Prevent Inoperability: Annual Deposits are Key
If you are unable to deposit at least Rs 500 annually, your PPF account becomes inoperative. Note that the maximum deposit allowed in a financial year is Rs 1.5 lakh.
Tax Benefits and Rule Adherence: Maximize Your Investment
Annual interest and maturity amounts received from your PPF investment are tax-free. However, to enjoy these benefits, it’s crucial to follow some rules. Make sure to invest a minimum of Rs 500 every year.
Act swiftly to protect your PPF investment from potential losses. Regular deposits and adherence to rules will not only secure your financial future but also maximize the benefits offered by this government-backed investment avenue.