PPF account holders alert! Top 5 changes in Public Provident Fund rule that you must know

PPF Account: The Public Provident Fund (PPF) is considered a long-term retirement-oriented investment. If the salaried person chooses to remain in old Income Tax Slabs for FY20-21, then he or she would be eligible for income tax deduction under Section 80C of the income tax act 1961 on up to Rs 1.5 lakh investment in one financial year. However, in December 2019, the Narendra Modi Government made some changes in the PPF rules and hence a PPF account holder needs to know those changes because it is directly related to one's personal finance and in the long-run, it would have some impact on their long-term retirement fund as well.

Elaborating upon the new PPF rules Jitendra Solanki, a SEBI registered tax and investment expert said, "Most important change made in recent Finance Ministry's notification in regard to PPF is lowering the interest rate on loan against PPF from 2 per cent to 1 per cent. Earlier, premature closure of PPF was not allowed, now one can close one's PPF account after five years of investment and joint PPF account can't be opened."

On top 5 important information that a PPF account holder needs to be aware of Solanki listed out the following information:

1] Number of PPF Accounts: One individual can have only one PPF account and one PPF minor account. The PPF minor account can be opened by either of the parents and in case of a specially-abled child, a guardian can open a PPF minor account even though the mentally challenged child is an adult.

2] PPF Investment: A PPF account holder can invest a minimum of Rs 500 to a maximum of Rs 1.5 lakh per annum. The upper limit is inclusive of all other PPF accounts opened by an individual means the net investment by an individual in one's PPF account and PPF Minor accounts should not go beyond Rs 1.5 lakh in a year.

3] PPF Account Closure: In case of a change in one's residential address, premature PPF account closure is allowed but not before five years of the PPF account.

4] Emergency Fund: In the case of any debt-default by the PPF account holder, the PPF account can't be attached against any court decree. so, your PPF balance can be an emergency fund in the case of such financial default; and 

5] PPF Account Revival: PPF account can be revived during the maturity period through the payment of Rs 50 and Rs 500 arrears for each year of PPF investment default.