Do you have multiple Public Provident Fund (PPF) in your name? If you have opened two or more PPF accounts on or after 12th December 2019, then you cannot merge them now. Earlier, the Department of Posts allowed investors to merge multiple accounts into a single PPF account. However, the authority had set a cut-off for the merger of PPF accounts which is on December 12, 2019.
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As per the PPF Rules, 2019, one person cannot have multiple PPF accounts in his name. Earlier last month, the Department of Economic Affairs (Budget Department) of the Finance Ministry had directed banks and post offices not to send any proposals. For considering the merger of PPF accounts opened under PPF Rules 2019, i.e. after December 19, 2019. The order was regarding amalgamation request of PPF account raised by Dr. Anupam Mishra in Indian Bank, KGM College, Lucknow branch.
On March 3, 2022, the Department of Economic Affairs (Budget Division), Ministry of Finance stated that a letter has been issued to all Head Post Offices, which mentioned, “If any of the PPF accounts or all the PPF accounts If the merger or amalgamation is opened on or after 12.12.2019, such account(s) shall be closed without payment of any interest and no payment shall be made to the Directorate of Posts for amalgamation of such PPF accounts. The offer should not be sent.”
What does this mean for PPF account holders
1) The cut-off date for merger of PPF accounts is December 12, 2019, and any PPF account opened after that date is not eligible for regularisation.
2) If multiple PPF accounts have been opened in your name on or before 12th December 2019, they cannot be clubbed. To save tax, many people open multiple PPF accounts – one PPF account in one bank, one in post office. Now, those accounts cannot be merged into a singular account.
3) “If any person has opened another account after the date mentioned, he shall not be entitled for any interest amount on the amount deposited and such account shall be closed after refund of the amount deposited. Hence, an investor who wants to invest in multiple PPF accounts will not be able to do so and will suffer loss of interest amount,” said Manit Pal Singh, partner, IP Pasricha & Co.
What happened to your multiple PPF accounts opened before December 12, 2019?
Those who have opened more than one PPF account before December 12, 2019, can club them if the deposit in both the accounts is within the prescribed deposit limit of Rs 1.5 lakh. PPF account holders will have the option to choose the account of their choice which they wish to continue with. If the amount exceeds the prescribed limit, the excess amount will be returned to the investor without any interest. The refund will be made from the account that the investor wishes to amalgamate.
“If PPF accounts are opened before the cut-off date, they can be merged if the amount deposited in both the accounts together is within the prescribed deposit limit. The excess amount is refunded to the investor without any interest,” said Abhinav Angirish, Founder, Investonline.in.
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