Changes in PPF Premature Closure Rules
The Department of Post has recently implemented significant modifications to the premature closure rules of the Public Provident Fund (PPF) accounts, as outlined in a notification dated November 7, 2023.
New Grounds for Premature Closure
PPF account holders can now request premature closure under specific circumstances, such as the treatment of a life-threatening disease, pursuing higher education, or a change in residency status. However, closure is not permissible before completing five years from the account opening.
Premature Closure Documentation
For premature closure, supporting documentation and medical reports for health reasons, admission confirmation and fee bills for education, and passport/visa or income tax return for change in residency status are mandatory for verification.
PPF Interest Calculation Changes
The interest calculation on premature closure has been amended. Previously, it was 1% lower than the rate credited from the date of opening. Now, it's 1% less than the interest periodically credited from the commencement of the current block period of five years.
PPF Interest Payment
Interest, calculated at 7.1% per annum, is paid on the lowest balance between the 5th day and the month-end. Annually, interest is credited to the account, regardless of any account office changes due to transfers during the year.
PPF Account Closure Process
Account holders can apply for PPF account closure after fifteen years from the opening, using Form-3. The withdrawal includes the entire balance plus interest up to the last day of the month preceding the concluding month.
Overall Impact on PPF Account Holders
In conclusion, these changes in PPF premature closure rules aim to provide flexibility under specific circumstances, with adjustments in interest calculation and closure procedures. Account holders are advised to familiarize themselves with these updates for a better understanding of their PPF accounts.