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Advantages:
· Tax benefits can be availed under sections 88 for the amount invested.
Interest accrued is Tax free.
· A PPF account cannot be attached by the Govt. or any court of law or
through any decree.
Features:
Apart from a Post Office, a PPF account can also be opened in SBI & its
associates and other select nationalized banks.
Nomination can be done at the time of opening the account or during the tenor
of the account.
15 years from the date of initial investment with a block of 5 years there-after
up to a max of 30 years incl. 15 years.
The PPF account matures after 15 years. One can then exercises on option of
continuing the account for an additional block of 5 years or close it.
The first loan can be taken in the third financial year from the date of opening
of the account, or up to 25% of the amount at credit at the end of the first
financial year. The facility can be availed of any before expiry of 5 years from
the end of the year in which the initial subscription was made. The loan is
repayable either in lump sum or in convenient installments numbering not
more than 36. Interest at 1% would be charged if loan is repaid in 36 months.
Such interest should of loan is not repaid within 36 months, interest on
outstanding amount of loan would be charged at 6%.
A withdrawal is permissible every year from the seventh financial year of the
date of opening of the account, of an amount not exceeding 50% of the
balance at the end of the 4th proceeding year or the year immediately
proceeding the year of the withdrawal, whichever is lower, less the amount of
loan if any.
The account can be transfered at the request of the subscriber from one office
to another, including from Bank to Post Office and vice- versa all over the
country.
A PPF account is free from any attachment under any order or decree of a
court in respect of any debt or other liability incurred by him
Non Resident Indians may also open a PPF account out of the funds in the
applicant's non-resident account in India in banks subject to the following
conditions –
· The account is marked as non-resident account
· All credits therein or debits thereto are made subject to the same
regulations as are applicable to non-resident account.