High lock-in period of PPF: How long does a nominee need to wait to get money?

While the lock-in period in PPF is 15 years, it provides liquidity in the form of loan and partial withdrawals.

Tax benefits on investments, interest and maturity make the Public Provident Fund (PPF) a preferred tax-saving investment. Moreover, apart from providing sovereign guarantee, the government also keeps the rate of interest on PPF higher than the prevailing FD rates, which makes it even more attractive.

Although PPF falls under the EEE (Exempt, Exempt, Exempt) category under income tax, it has the longest lock-in period among the tax-saving investment instruments.

While the lock-in period in PPF is 15 years, it provides liquidity in the form of loan and partial withdrawals. Loans against the PPF account are available after 3 years from opening an account and the partial withdrawal facility is available after 6 years of the account opening.

After the initial investment period of 15 years, PPF investors have the option of extending the period by a slab of 5 years without any cap on the number of extensions.

Investors may extend the period with further investments or without any investment. If the period is extended with contributions, lock-in will be applicable on the extended period as well. However, in case of extension without any contributions, there will be no lock-in period.

Public Provident Fund: How much cash can you deposit in a PPF account in a day?

After the death of a PPF Account holder, can a nominee continue the account or has to stop it?

“After the death of a PPF account holder, the nominee is not eligible to continue the PPF account for the remaining period. The balances can be claimed by filing Form G. In case there is no nomination, legal heirs can claim the balances. (Succession certificate is not required for balances less than Rs 1,00,000). The balance in the account of the deceased account holder shall earn interest till the end of the month preceding the month in which the eligible balance is paid to the nominee,” said Sudhakar Sethuraman, Partner, Deloitte India.

But, how long does the nominee have to wait due to the lock-in period in PPF?

Informing that there is no lock-in period for nominees, Sethuraman said, “If, for example, an investor dies within five years after opening a PPF account and making contributions in it, the nominee is not required to wait for ten years. On submitting Form G and successful verification by respective offices, the eligible balances will be remitted to the nominee. Interest will continue till the preceding month in which the eligible balance is paid to the nominee. Please note that the nominee cannot contribute to the PPF account.”

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Source link


Coronavirus Cases in India Live Update: Black Fungus Infection India Update, Coronavirus Vaccine Tracker Live, Coronavirus Statistics India, Coronavirus Prevention Tips, Fresh Covid-19 Cases...

A health worker collects swab samples of a passenger arriving from Maharashtra at a COVID-19 testing counter at Patna railway station. (PTI photo)Coronavirus...

Covid-19 shook India’s health infra: Helping hands from across the world saved lives

Many countries also came forward to help India emerge from the COVID-19 crisis.By Prashant Agarwal,COVID-19 cases began rising from across the world from...

Ex-Apollo CEO Leon Black raped and harassed Russian model, lawsuit alleges

Leon Black, the former chief executive of Apollo Global Management, has been hit with a lawsuit claiming that he raped and harassed a...

Beverly Hills, 90210 star Jason Priestley, 53, looks dapper in a dark suit

Jason Priestley, 53, cut a stylish figure as he attended the screening of his new film Offside: The Harold Ballard Story in Toronto...

Jeremy Clarkson apology: Harry and Meghan ‘love the drama’, says Sarah Abo

Prince Harry and Meghan Markle were never going to accept an apology from Jeremy Clarkson, no matter how sincere, because they 'love the...