Income Tax 2015 - PPF FAQ's on Maturity Date , Extension Period , Loan Amount , Withdrawal Amount , Taxability of Interest from Public Provident Fund

Friends,

A person who has PPF account should read this article.  Even I had also opened PPF account 15 years ago, but was not aware about the date of Maturity of PPF account till date.  I mean to say I had opened my account on 19-10-1999 and was in view that my account will be closed after 15 years which will be 19-10.2014.  I was happy  to get maturity amount but bank has told me that maturity date of your PPF account is 31.03.2015.  It was shocked information  for me.  Therefore I request from all PPF account holders to read the below article to know regarding Maturity Date , Extension Period , Loan Amount , Withdrawal Amount or Taxability of Interest from Public Provident Fund account.

Some General Questions regarding PPF

• PPF account can not be extended after 15 years completion (maturity) .
• PPF account can be extended for 5  years after 15 year completion (maturity) Maximum period can be 15 years.
• PPF account can be extended after 15 years period (maturity) for block of 5 years at a time ,as many times as you want.

More than 80 % of person selected option (2) i.e PPF account can only be extended for 5 years after completion of 15 years period  and most of them are from accounting and finance field and having Graduate or Post Graduate degrees in Finance/Accounting.

 But is Option (2) is correct ? What you think ?

Before answering the above query first you should know 

what is maturity period for PPF Account . Means how to calculate 15 years period ? 

Relevant rule is given as under[rule 9(3)]

"....any time after the expiry of 15 years from the end of the year in which the initial  subscription was made by him "

Year here means :Financial year 

So, as per PPF rules ,15 years is to be taken from the end of initial subscription year. Means by default each PPF account is to be matured on 31st March only .

Example : PPF  Account opened on 15-10-1999 ,calculate maturity date.

Ans : As per rule given above 15 years is to be taken from end of initial subscription year . In above case end of initial  financial year is 31.03.2000 and 15 years from 31.03.2000 ends on 31.03.2015 .So maturity date in above case is 31.03.2015.

What are the option available on maturity of PPF account?

On maturity of your PPF account you have three option

1. Withdraw full amount and closed your account .
2. Extend your account for a block of Five years without subscription.
3. Extend PPF account for a block of Five years with subscription.

1.Withdraw full amount : First option need not more elaboration , you can withdraw full amount on maturity and amount received will be fully exempted from Income Tax .You have to apply on Form C to withdraw the amount .Interest up to the last day of the month preceding the month in which the application for withdrawals made will be given so make sure that you should apply for withdrawal in first week of the month to avoid possible loss of interest.

2.Extend PPF account for the Block of Five years without subscription : if you wish to continue but not want to  invest further? In other words, you may wish to earn the tax-free interest but may not wish to commit further funds. That, too, is possible.This Option is automatic,means if you does not opt for  "with subscription" option in one year from the end of the maturity period ,this option without subscription will be applied automatically .

The only thing that investors should be careful of is that once an account is continued without contribution for any year, the subscriber cannot change over to with-contributions extension. [Notification F.3(6)-PD/86 dt 20.8.86].

Withdrawal of balance Amount : In case the account is extended without contribution, any amount can be withdrawn without restrictions.(use form C) However, only one withdrawal is allowed per year. The balance will continue to earn interest till it is completely withdrawn.(Clarification 7 to Clause 9(3A) of the PPF Scheme, 1968).

So you can withdraw full amount in you account any time during extend time.

3. Extension of PPF account With Further Subscription:As per the PPF rulebook:

“Subject to the provisions of sub-paragraph (3) a subscriber may, on the expiry of 15 years from the end of the year in which the initial subscription was made but before then expiry of one year thereafter, may exercise an option with the Accounts Office in Form H, or as near thereto as possible, that he would continue to subscribe for a further block period of 5 years according to the limits of subscription specified in paragraph 3.” This Option must be opted on FORM -H ,with in one year from the end of the maturity period ,otherwise option without subscription will be applied automatically .

Example : PPF account opened on 21.08.2000.What is the maturity date ?when we should apply on form "H" for extension of PPF account with subscription ?

Ans :As the account was opened on 21.08.2000 ,to calculate maturity date ,15 years to be counted from end of the initial subscription year.In above example Initial subscription year is 2000-2001 and ends on 31.03.2001.

15 years from 31.03.2001 ends on 31.03.2016,so maturity date is 31.03.2016.

Extension application on Form H should be made before the end of one year from maturity date .

so in above case

Maturity date is =31.03.2016

Form H application should be made with in  : 01.04.2016 to 31.03.2017.(Download PPF account scheme Form H)

So in above case ,If  person  do not apply on form H before 31.03.2017 then his account will be extended automatically as"Extension without subscription" and can not be changed back to "Extension with subscription".

Limit of withdrawal in extended period :Coming to liquidity, an investor, continuing his account with fresh subscriptions, can withdraw up to 60% of the balance to his credit at the commencement of each extended period in one or more installment, but only one per year.(Notification F.7/2/97-NS IIdt. 9.2.1998). 

For example, say the term of your PPF account is ending on March 31, 2013. The balance at that time in the account is say Rs 20 lakh. Now, you may opt to continue the account for 5 more years (i.e. till March 31, 2018) and invest regularly as you have been.However, over the period of next five years till March 2018, you may withdraw only Rs 12 lakh which is 60% of the balance standing to your credit on March 31, 2013.Further you can withdraw only once in each year .

Correct answer :This time answer given by majority of person(more than 80 %) is incorrect and this result has come when correct answer was also available in option and most of persons who has attempted the  question is from Finance / accounting field. We have also given a hint by commenting that why persons are not selecting the Answer (1) and (3) ,even then participant stick with option two. Though CA Ritika pundir and Nilam Rathod selected the correct option . Correct answer is (3) .

As per Sec 9(3) of the PPF Scheme, at its maturity, the account can be continued for a block of 5 years. This facility is available for any number of blocks on expiry of each of the extended periods. The continuation can be with or without contribution.so We can extend PPF account after completion of 15 years by block of 5 years ,as many time as we wish . PPF is popularly known as 15 year scheme .However, after the initial period of 15 years is over, one can keep on extending the deposit for a period of 5 years at a time.

One need not start a fresh PPF account and continue it for all of 15 years.Just extend the old one for five years at a time, indefinitely.

Union Public Service Commission (UPSC) Recruitment for various posts 2013-14

Friends,

Union Public Service Commission (UPSC) invites applications from eligible candidates for various posts as mentioned below vide Advertisement No. 18/2013. The interested candidates can apply in online mode only through the link provided on the official website of UPSC by useing the Online Recruitment Applications (ORA) system at http://www.upsconline.nic.in. The candidates can also read the detailed instructions in the Employment News 23-29 November 2013. The candidates are advised to ensure their eligibility beofre applying for these posts by going through the advertisement carefully. The selection of the candidates will be made on the basis of final Interview. The brief details are as under : 

Name and No. of Posts:

• Director : 01 post in Regional Station for Forage Production and Demonstration, Department of Animal Husbandry, Dairying and Fisheries, Ministry of Agriculture
• Veterinary Assistant Surgeon : 01 post in Central Sheep Breeding Farm, Hisar, Department of Animal Husbandry, Dairying and Fisheries, Ministry of Agriculture
• Assistant Professor (Anesthesia) : 01 post in Ministry of Health and Family Welfare.
• Assistant Professor (Biochemistry) : 11 posts in Ministry of Health and Family Welfare. 
• Three Assistant Professor (Microbiology) : 03 posts in Ministry of Health and Family Welfare.
• One Assistant Professor (Neurology) : 01 post in Ministry of Health and Family Welfare.
• Assistant Professor (Neuro-Surgery) : 10 posts in Ministry of Health and Family Welfare. 
• Assistant Professor (Paediatric Surgery) : 07 posts in Ministry of Health and Family Welfare. 
• Assistant Professor (Pathology) : 13 posts in Ministry of Health and Family Welfare
• Assistant Professor (Physical Medicine and Rehabilitation) : 05 posts in Ministry of Health and Family Welfare
• Assistant Professor (Radio-diagnosis) : 11 posts in Ministry of Health and Family Welfare
• Specialist Gr.II (Microbiology) : 13 posts in the Non-Teaching Sub-Cadre of CHS in Ministry of Health and Family Welfare 
• Specialist Gr.II (Pathology) : 15 posts in the Non-Teaching Sub-Cadre of CHS in Ministry of Health and Family Welfare. 
• Professor-cum-Deputy Director : 05 posts in Central Institute of Indian Languages, Mysore, Department of Higher Education, Language Division, Ministry of Human Resource Development.
• Training Officer [ Cutting & Tailoring] : 01 post in Directorate General of Employment & Training, Ministry of Labour and Employment
• Training Officer [Draughtsman-(Mechanical)/Engineering Drawing/Reading of Drawing and Arithmetic] : 02 posts in Directorate General of Employment & Training, Ministry of Labour and Employment. 
• Training Officer [Electrician] : 02 posts in Directorate General of Employment & Training, Ministry of Labour and Employment. 
• Training Officer [ Electronics/Micro Computer] : 02 posts in Directorate General of Employment & Training, Ministry of Labour and Employment. 
• Training Officer [Machinist] : 01 post in Directorate General of Employment & Training, Ministry of Labour and Employment.
• Two Training Officer [Turner] : 02 posts in Directorate General of Employment & Training, Ministry of Labour and Employment.  
• Training Officer [Wireman] : 01 post in Directorate General of Employment & Training, Ministry of Labour and Employment.
• Senior Assistant Director (Handicrafts) : 01 post in office of the Development Commissioner (Handicrafts), Ministry of Textiles.  
• Reader (Microbiology) : 01 post in Government Medical College & Hospital, Chandigarh, Department of Medical Education & Research, Chandigarh Administration
• Senior Lecturer (Community Medicine) : 02 posts in Government Medical College & Hospital, Chandigarh, Department of Medical Education & Research, Chandigarh Administration.  

Age Limit: Candidates upper age limit should not be exceed as per post norms. For this view advertisement for post applied for .

Educational Qualifications: Candidates should be possess PG or B.Sc/ M.Sc , Bachelor Degree, PG Degree - M.D / M.S / D.A, MBBS or its equivalent qualifications from any reputed university.

How to Apply: Candidates may go online portal of UPSC for online fill application form and submit before 12th Dec 2013.

Important Dates of UPSC:

1. Last date for online submission of applications : 12.12.2013

2. Last date for printing of applications: 13.12.2013

For more details Download Advertisement

Recruitment Portal of UPSC

Cut Down in Interest Rates on Public Provident Fund and National Savings Certificates w.e.f. April 1, 2013

Friends,

Public Provident Fund (PPF) and National Savings Certificates (NSC) are two ways which are used by most of to save Income Tax in a Financial Year by investing required amounts in these schemes.Public Provident Fund (PPF) is fund by which investing in this fund the investor has a great benefit i.e. the Interest amount received at the time of maturity is fully exempted from tax. That's why most of us like to invest in this fund. Now hundreds of thousands of investors will get lower returns on small savings schemes like Public Provident Fund (PPF) and National Savings Certificates, with the government pruning the interest rate by 0.1 percent. The interest rate on PPF has now been cut to 8.7 per cent from 8.8 percent with effect from 1 April, 2013, while the rate on five-year NSC has been cut to 8.5 percent from 8.6 percent, and that on 10-year NSC to 8.8 percent from 8.9 percent. The finance ministry, which cut the rates, has however left the savings deposit rate and the one-year time deposit rate unchanged. The savings deposit rate has been left unchanged at 4 percent and the one-year term deposit too stays at 8.2 per cent.

PPF Investment limit raised to Rs. 1 Lac from Rs. 70000/-

Friends,

Its a good news for PPF Investors. Now the limit of PPF deposit has been increased to Rs. 1 Lac from Rs. 70,000/-. You will be glad to know that the Interest Rate on PPF has also increased. Now the interest rate on PPF is 8.6% (earlier it was 8%) . Further few more changes has also been proposed in other schemes.we will update effective date as soon as confirmed.

1. PPF Investment limit raised to 100000 from 70000.

2. Interest on PPF account has been raised to 8.6 % from 8 %

3. Interest on loan from PPF raised to 2 % from 1 %.

4. Commission on PPF deposit has been abolished.

5. Committee on Nation Saving Scheme has also recommended above Changes as detailed below.

The Committee recommends an upward revision in the investment limit to `1 lakh. 

Committee recommends that the rate of interest on advances against deposits may be fixed at 2 percentage points higher than the prevailing interest rate on PPF (as against 1 per cent at present).

Other Major changes.

1. KVP (Kissan Vikas Patra ) also discontinued.

2. NSC maturity period reduced to 5 years , new NSC with maturity period of 10 years will also be issued

3. Interest on NSC has been increased  to 8.4 % from 8 %

4. Interest on Post office savings account raised to 4 % from 3.5 % earlier.

5. Commission to agent on all saving schemes reduced to 0.50 % from earlier 1 %.

6. Commission to agent on PPF and Senior citizen scheme also abolished. 

Recommendation of committee on NSC with has been approved by Government.

(i) Two NSC instruments would be available with maturities of 5 years and 10 years;

(ii) The interest rates would be  bench marked to 5 year and 10 year government securities;

New interest rate is given below

Interest Rates on Small Savings Instruments

The rate of interest paid under Post Office Savings Account (POSA) will be increased from 3.5% to 4% p.a. The rate of interest on small savings schemes will be aligned with G-Sec rates of similar maturity, with a spread of 25 basis points (bps) with two exceptions. The spread on 10 year NSC (new instrument) will be 50 bps and on Senior Citizens Savings Scheme 100 bps. The interest rates for every financial year will be notified before 1 st April of that year.

Assuming the date of implementation of the recommendations of the Committee as 1st December, 2011, the rate of interest on various small savings schemes for current financial year on the basis of the interest compounding/payment built in the schemes, will be as given below (See chart)

Payment of 5% bonus on maturity of MIS will be discontinued.

Commission to Agents reduced/Abolished.

Commission to Agents

(i) Payment of commission on PPF schemes (1%) and Senior Citizens Savings Scheme (0.5%) will be discontinued.

(ii) Agency commission under all other schemes (except MPKBY agents) will be reduced from existing 1% to 0.5%.

(iii) Commission at existing rate of 4% will continue for Mahila Pradhan Kshetriya Bachat Yojana (MPKBY) agents.

(iv) Incentives, if any, paid by the State/UT Governments will be reduced from the commission paid by the Central Government.

SDE Civil/Electrical Recruitment in Punjab Public Service Commission (PPSC) - 2013

Friends,

Punjab Public Service Commission (PPSC) invites applications from eligible candidates for the posts of Sub Divisional Engineers (Civil/Electrical) in various department of the Government vide Short Advertisement No. 08(ii) dated 20.12.2012. The interested candidates can apply in ONLINE mode only through the link provided on the official website of PPSC www.ppsc.gov.in. The candidates in their own interest are advised to ensure their eligibility and other terms and conditions as prescribed by Punjab Public Service Commission (PPSC) before applying for these posts.  The printout of the filled Online Application Form along with demand draft and relevant documents must reach office of Secretary, Punjab Public Service Commission Latest by 5.00 pm on 21st January, 2013.The number of vacancies to be filled for the Post of on the basis of Sub Divisional Engineering are given below:

Total No. of Vacancies: 25 

I. Sub Divisional Engineer (Civil): 22

1. General: 12 posts

2. ESM/LDESM, Punjab: 01 post

3. SC, Punjab: 01 post

4. S. C. ESM/LDESM, Punjab: 01 post

5. S. C. Sports Person, Punjab: 01 post

6. B/M Sikh Punjab: 02 posts

7. B. C. Punjab: 03 posts

8. B. C. ESM/LDESM, Punjab: 01 post

II. Sub Divisional Engineer (Electrical): 03

1. General: 01 post

2. ESM/LDESM, Punjab: 01 post

3. B. C. Punjab: 01 post

Age Limit: Candidates age must be between 18 to 38 years as on 01-01-2012.

(Age relaxations will be as per the rules.)

Educational Qualifications: Candidates must possess Degree in Civil Engineering/Electrical Engineering from a recognized University along with the knowledge of Punjabi Language.

Application Fee: Unreserved Candidates must pay Rs.500/- , PWD Candidates must pay Rs.250/- and SC/ST Candidates must pay Rs.125/- as Application Fee in the form of Single demand draft issued by State Bank of Patiala or State Bank of India drawn in favor of “Secretary, Punjab Public Service Commission”, payable at Punjab. No fee for Ex-Serviceman Candidates. Applicants should write for the post applied, Registration Number, name and address in Block Letters on the back side of Demand Draft.

How to Apply : The candidate must have the following before attempting to fill the Online Application Form:

1) A valid email account which has not been used for filling Online Application Form for any other candidate applying for this Examination. Two or more candidates cannot share the same email ID. All future correspondence with the candidate will be made through the registered email ID.

2) A mobile phone number, which may be used to contact the candidate. It is not necessary that the candidate must have mobile connection in his/her name. The candidate may register any mobile number for communication. More than one candidate may register the same mobile number, however, information given on that mobile number shall be deemed to have been delivered to all such candidates.

3) Scanned copy of a recent passport size photograph (jpg/jpeg format), as per specifications given later in these instructions.

4) Scanned copy of the signature of the candidate (jpg/jpeg format), as per specification given later in these instructions.

5) Scanned copy of the Demand Draft (jpg/jpeg format) issued by State Bank of Patiala or State Bank of India for payment of fee as applicable, as per the specifications given later in these instructions. Fee should be paid by a SINGLE Demand Draft issued by any branch of State Bank of India or State Bank of Patiala, which should be drawn in the favour of “Secretary, Punjab Public Service Commission” , payable at Patiala.

6) A computer system with a printer attached to it. The computer system must have Internet Explorer, Mozilla Firefox or Google Chrome browser and Adobe Acrobat Reader for filling and downloading the filled application form in PDF format.

Important Instructions for Online Application:

• Log on to the website www.ppsc.gov.in.
• Candidates have to scan their photograph, Signature and scanned before starting the online applying process.
• Read the instructions carefully and then start the filling of application form by clicking on the next button.
• Candidates have to fill the application form within 30 Minutes. Otherwise the session will be closed.
• Fill all the fields otherwise it will not proceed.
• Fill the Bank details as per their category and educational details and reproduce Security Key.
• Next upload the file containing image of photo, DD, Signature in prescribed manner.
• After Completion candidate can click on preview button and lock. By Clicking Once on Lock Changes are not possible.
• Take 2 copies of submitted application form out of which one can be send to the office of PPSC.
• After submission of online application candidates have to note the Registration Number.

Important Dates:

• Advertisement Issued date: 21-12-2012.
• Last Date for Filling Online Application: 11-01-2013.
• Last Date for Receipt of Online Applications along with relevant Documents: 21-01-2013.

Download Advertisement (English) (Punjabi)

Instructions for Candidates

PPF/SCSS Interest Rates Increased w.e.f. 01.04.2012

Friends,

Interest rates on Public Provident Fund,1968 (PPF-1968) and Senior Citizens Savings Scheme, 2004 (SCSS-2004) has been revised w.e.f 01.04.2012. Now onwards the interest rate on Public Provident Fund (PPF) will be 8.8% p.a. instead of 8.6% p.a. and on Senior Citizens Savings Scheme it will be 9.3% p.a. instead of earlier 9.0% p.a. A circular of Revision of Interest Rates on Small Savings Scheme ha been issued by Reserve Bank of India (RBI)  vide ciruclar no. DGBA.CDD. NO. H- 6506/15.02.001/2011-12, DATED 3-4-2012. You can read the detailed circular as under :-

SMALL SAVINGS SCHEMES - PUBLIC PROVIDENT FUND SCHEME, 1968 (PPF, 1968) AND SENIOR CITIZENS SAVINGS SCHEME, 2004 (SCSS, 2004) - REVISION OF INTEREST RATES CIRCULAR DGBA.CDD. NO. H- 6506/15.02.001/2011-12, DATED 3-4-2012

Please refer to our circular RBI/2011-12/359, dated January 20, 2012 regarding interest rates on small savings schemes, wherein it was indicated that as per Government's decision on revision of interest on small savings schemes, the interest rates on various small savings schemes for every financial year will be notified by the Government before April 1st of that year.

The Government of India have vide their Office Memorandum (OM) No. 6-1/2011-NS.II (Pt.), dated March 26, 2012, advised the rate of interest on various small savings schemes for the financial year 2012-13. Accordingly, the rates of interest on PPF, 1968 and SCSS, 2004 for the financial year 2012-13 effective from April 1, 2012, on the basis of the interest compounding/payment built-in in the schemes, will be as under:

Scheme	Rate of Interest w.e.f. 01.12.2011	Rate of Interest w.e.f. 01.04.2012
5 year SCSS, 2004	9.0% p.a	9.3% p.a
PPF, 1968	8.6% p.a	8.8% p.a

The contents of this circular may be brought to the notice of the branches of your bank operating the PPF, 1968 and SCSS, 2004 schemes. These should also be displayed on the notice boards of your branches for information of the PPF, 1968 and SCSS, 2004 subscribers.

PPF Deposit Limit Raised 70,000 to 1,00,000 (Recommendations)

Friends,

There is a provision of Saving under Section 80C of Income Tax as Public Provident Fund (PPF). Earliear there was a limit of maximum investment under this scheme was Rs. 70,000/-. Now as per requirement of all the Income Tax Payees the Government is going to increase this limit to Rs. 1,00,000/- per head. 

Modification in PPF Scheme : Deposit Limit Raised from Rs. 70,000 to Rs. One Lac while Rate of Interest on Advances Against Deposits in PPF Scheme Raised from 1% to 2 Percentage Points

The Committee on Comprehensive Review of National Small Savings Fund (NSSF) headed by Deputy Governor, RBI has recommended revision of certain provisions of PPF Scheme, 1968 and benchmarking of interest rates on various small savings schemes with the secondary market yields on Central Government securities of comparable maturities with suitable spread.

The Committee has recommended increasing the deposit limit under PPF Scheme from existing Rs. 70,000 to Rs. 1 lakh per annum and fixing of rate of interest on advances against deposits in PPF scheme at 2 percentage points as against the prevailing interest rate on such advances at 1%.

The Committee has further recommended benchmarking interest rate on small saving schemes to interest rate on Government securities of similar maturities with a positive spread of 25 basis points on all schemes except for 50 basis points for 10 year NSC and 100 basis point for Senior citizens Savings Scheme. 

Recommendations of the Committee have been referred to State Governments and concerned Ministries/ Departments of Central Government for their comments.

This information was given by the Minister of State for Finance Shri Namo Narain Meena in a written reply to a question raised in Rajya Sabha today.

So from above and after verifying the fact from RBI website it is 100% sure that Limit is still not raised  and will be raised/decided  after receiving comments from State GOvt and other concerned Department and Ministries.