Public Provident Fund account holder? 5 recent PPF changes you might have missed

When it comes to long-term fixed return investment schemes, the Public Provident Fund or PPF is a lucrative long-term option. Backed by the Government of India and offers a fixed return on investment - the scheme comes with a lock-in period though. In SBI PPF account, premature withdrawal can be done after 6 years. Subscribers should know that the full lock-in period is 15 years and that this can be extended by 5 year periods. Notably, both interest rate and returns are fully exempted from income tax. A PPF account can be opened by resident Indian individuals and individuals on behalf of minors too. The government, however, keeps making changes to PPF rules to keep abreast of changes in the real economy. Here are five recent PPF changes that you should know and may well have missed. 

Eligibility for opening PPF account:

1.  Earlier, a PPF account holder could have made a maximum of 12 deposits in a year. Now, the investors are allowed to make any number of deposits as long as they are in multiples of Rs 50. The combined deposit limit remains Rs 1.5 lakh per year.

2.  PPF investors can now prematurely close their public provident fund account on change in residency status of the account holder on production of a copy of passport and visa or income tax return. 

3.  If the PPF account holders are unable to repay their loan in 36 months, the penal interest will be charged at the rate of 6% per annum.

4.  The investors can extend their PPF account after maturity within one year of the date of maturity of original PPF account or extended PPF account. They need to submit an application in Form 4 for the same. Earlier, the account holders needed to submit Form H. 

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5.  The PPF account holders can apply for a loan on PPF money between the third and sixth financial year of opening an account. The government has now reduced the interest rate charged on loan taken against PPF balance to 1% above the prevailing PPF rate from 2% earlier.