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THE PUBLIC PROVIDENT FUND SCHEME, 1968

GSR 1136:- In exercise of the powers conferred by Section 3 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government hereby makes the following scheme, namely:-

  1.      Short title and commencement:- (1) This scheme may be called the Public Provident Fund Scheme, 1968.

            (2)     It shall come into force on 1st July 1968.

  2.      Definitions:- In this Scheme, unless the context otherwise requires:-

 (a)        ‘Account’ means a Public Provident Fund Account under this scheme.

 (b)        ‘Accounts Office’ means an office or branch of all public sector banks and ICICI Bank, Axis Bank and HDFC Bank Ltd.  and any other office authorised by the Central Government to receive subscriptions under the Scheme;

(Inserted vide MOF(DEA) notification vide F.No.7/10/2014-NS dated 10th October, 2017)

 (c)        ‘Accounts Officer’ means the person who for the time being is incharge of an Accounts Office.

 (d)        ‘Act’ means the Public Provident Fund Act, 1968 (23 of 1968)

 (e)        ‘Form’ means a form appended to this scheme;

 (ee) ‘Guardian’ in relation to a minor, means:-

 (i)          Father or mother; and

 (ii)         Where neither parent is alive, or where the only living parent is incapable of acting, a person entitled under the law for the time being in force to have care of the property of minor;

 (f) ‘Year’ means the financial year (1st April to 31st March)

 3.       Limit of subscription: - (1) Any individual may, on his own behalf or on behalf of a minor of whom he is the guardian, subscribe to the Public Provident Fund (thereafter referred to as the Fund) any amount not less than Rs. 500 and not more than Rs. 1,50,000 in a year.

 Limit revised from Rs.1,00,000/- to Rs.1,50,000/- vide G.O.I, Gazette Notification No. G.S.R. 588 (E) dated 13.08.2014 issued by MOF (DEA)       

(2)     Omitted.

  Explanatory Note:- The existing accounts opened by HUF and an association of persons or a body of individuals consisting in either case, only of husband and wife governed by the system of community of property in force in the State of Goa and the Union Territories of Dadra and Nagar Haveli and Daman and Diu before 13.5.2005 will continue till maturity and will not be extended further. No interest will be paid for the period after the date of maturity. The deposits/withdrawals in/from these accounts shall be allowed to be made in accordance with the said rules. Any such accounts opened on or after 13.5.2005 shall be treated as void ab-initio and immediate action should be taken to close such accounts and refund the deposits without any interest to the subscribers. Such accounts once closed cannot be opened again w.e.f. 13.5.2005.

  (3)     Non-Resident Indians are not eligible to open an account under the Public Provident Fund Scheme.              

Provided that if a resident, who subsequently becomes Non Resident Indian during the currency of the maturity period prescribed under Public Provident Fund Scheme, may continue to subscribe to the Fund till its maturity on a Non Repatriation Basis.

 “Provided that if a resident who opened an account under this scheme, subsequently becomes a non Resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes a non-resident and interest with effect from that date shall be paid at the rate applicable to the Post Office Saving Account up to the last day of the month preceding the month in which the account is actually closed.”

(Inserted vide MOF(DEA) vide GSR1237(E) dated 3rd October, 2017)

  The above said notification kept in abeyance till further order vide F.No.01/102/016-NS dated 23rd February, 2018.

  4.      Manner of making the subscription:- (1) Every individual desirous of subscribing to Fund under the Scheme for the first time either on his own or on behalf of a minor of whom he is the guardian shall apply to the Accounts Office in Form A together with the amount of initial subscription which shall be minimum of Rs.100

 2)      On receipt of an application under sub-paragraph (1), the Accounts Office shall open an account in the name of the subscriber and issue a passbook to him, wherein all amount of deposits, withdrawals, loans and repayment thereof together with interest due shall be entered over the signature of the Accounts Officer with the date stamp.

 Provided that in case of Post Offices working on Core Banking solution platform, a statement of account shall be issued in place of passbook at the discretion of account holder.       

(3)     The subscriber shall deposit his subscription with the Accounts Office with challan in Form B, or as near thereto as possible. The counterfoil of the challan shall be returned to the depositor by the Accounts Office, duly evidenced by receipt. In the case of deposits made by cheque or draft or pay order, the Accounts Office may issue a paper token to the depositor pending realization of the proceeds.               

(4)  Every subscription shall be made in cash or crossed cheque or draft or pay order in favour of the Accounts Office at the place at which that office is situated.

“Provided that where the Account office is working on Core Banking platform, every subscription shall be made either by cash, cheque, draft, pay orders or any electronic mode in any Account office working on Core banking Solution platform.”

 (5)     Where a deposit is made by means of an outstation cheque or instrument, collection charges at the prescribed rate shall be payable alongwith the deposit and the date of realization of the amount shall be the date of deposit.

Explanatory Note from Author:- A clarification was issued vide MOF(DEA) letter no. F.(3)9-PD/72 dated 4.9.1972 vide which it was clarified that when a subscriber makes a deposit by a local cheque or demand draft, the date of tender of cheque or draft at the Accounting Office will be treated as date of deposit. MOF(DEA)  modified its letter no. F.(3)9-PD/72 dated 4.9.1972 vide its letter no. 7/7/2008-NS-II dated 10.02.2010 to the extent that when the deposit is made in PPF account by means of a local cheque or demand draft by the subscriber, the date of realization of the amount will be the date of deposit.

5.      Number of subscription: The subscription, which shall be in multiples of  Rs.5 may, for any year, be paid into the account in one lump sum or installments not exceeding twelve in a year.

6.      Transfer of Account:- A subscriber may apply for transfer of  his account from one “Accounts Office” to another “Accounts Office”.

7.      Issue of duplicate passbook, etc:- (1) In the event of loss or destruction of a passbook issued by an Accounts Office, the Accounts Office may, on an application made to it in this behalf, and on payment of rupee one by the subscriber, issue a duplicate thereof to him.

(2)     Condition of default:- A subscriber who fails to subscribe in any year according to the limits specified in paragraph 3, may approach the Accounts Office for condonation of the default, on payment, for each year of default, a fee of Rs. 50 along with arrear subscription of Rs. 500 for each year.

8.      Interest:- Interest at the rate, notified by the Central Government in the official gazette from time to time, shall be allowed for a calendar month on the lowest balance at credit of an account between the close of the fifth day and the end of the month and shall be credited to the account at the end of each year.

Provided that where the interest to be credited contains a part of a rupee, then, if such part is fifty paise or more, it shall be increased to one complete rupee, and if such part is less than fifty paise, it shall be ignored.

Note:- The rates of interest payable on deposits and the balance in PPF Accounts fixed from time to time since the introduction of the Scheme are given in the Schedule at the end of the Chapter.

9.      Withdrawals from the Fund:- (1) Any time after the expiry of five years from the end of the year in which the initial subscription was made, a subscriber may, if he so desires, apply in Form C or as near thereto as possible, together with his passbook to the Accounts Office withdrawing from the balance to his credit, an amount not exceeding fifty per cent of the amount that stood to his credit at the end of the fourth year immediately preceding the year of withdrawal or at the end of the  preceding year, whichever is lower, less the amount of loan, if any, drawn by him under paragraph 10 and which remains to be repaid:

Provided that not more than one withdrawal shall be permissible during any one year.

         (2)       On receipt of an application under sub paragraph (1) the Accounts Office may, after satisfying itself that the amount of withdrawal applied for is not in excess of the limit prescribed in sub Paragraph (1) and that the applicant has, till the date of application , been subscribing according to the limit specified in Paragraph 3, subject to the provisions of sub-paragraph (4), permit the withdrawal and enter the amount withdrawn in the pass book. 

         (3)     Closure of account or continuation of account without deposits after maturity:-                                Notwithstanding the provisions of sub-paragraph (1), any time after the expiry of 15 years from the end of the year in which the initial subscription was made by him, a subscriber may, if so desires, apply in Form C or as near thereto as possible together with his pass book to the Account Office, on receipt of such an application from the subscriber, shall subject to the provisions of sub-paragraph (4) allow the withdrawal of the entire balance ( together with interest upto the last day of the month preceding the month in which the application for withdrawal is made ) after making adjustments, if any, in respect of any interest due from the subscriber on loans taken by him and close his account. Provided that a subscriber may, if so desires make withdrawal of the amount standing to his credit, from time to time, in instalments not exceeding one in a year.

 PPF accounts opened in the name of HUF prior to 13.5.2005 will be closed on maturity i.e 31st March of the 16th Financial Year from the year in which account was opened. No further interest will be admissible.

 PPF accounts opened in the name of HUF prior to 13.5.2005 but have already been matured but not yet closed, shall be closed on 31st March 2011 after which no further interest shall be admissible.

 Explanatory Note From Author:- Inserted vide MOF(DEA) vide GSR(E) dated 7.12.2010 ( F.No. 7/4/2010-NS-II dated 7.12.2010) after Sub-paragraph (3) of Paragraph 9 of PPF Scheme.       

         (3A)  Continuation of account with deposits after maturity:- Subject to the provisions of subparagraph (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 the 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.

 (3B) In the even of a subscriber opting to subscribe for the aforesaid block period he shall be eligible to make partial withdrawals not exceeding one every year by applying to the Accounts Office in Form C, or as near thereto as possible, subject to the condition that the total of the withdrawals, during the 5 year block period, shall not exceed 60 per cent of the balance at his credit at the commencement of the said period.

  Note: - A subscriber may at his option (to be exercised before the expiry of the first year of every extended block period) avail of this facility for a further block of 5 years on expiry of 20 years or on expiry of 25 years and so on, from the end of the year in which the initial subscription was made.

 (4)     Where the application is made by a person who has made subscription to the Fund on behalf of a minor of whom he is the guardian, he shall furnish a certificate in the following form, namely……… “Certified that the amount sought to be withdrawn is required for the use of……………..who is alive and is still a minor”.

  10.    Loans: - (1) Notwithstanding the provisions of paragraph 9, any time after the expiry of one year from the end of the year in which the initial subscription was made but before expiry of five years from the end of the year in which the initial subscription was made, a subscriber may, if he so desires, apply in Form D or as near thereto as possible, together with his passbook to the Accounts Office for obtaining a loan consisting of a sum of whole rupees not exceeding twenty five per cent of amount that stood to his credit at the end of the second year immediately preceding the year in which the loan is applied for.

  (2)     On receipt of an application under sub-paragraph (1), the Accounts Office may, after satisfying itself that the amount of loan applied for is not in excess of the limit prescribed in sub-paragraph (1) and that the application has, till date of application, been subscribing according to the limit specified in paragraph 3, subject to the provisions of sub paragraph (3), sanction the loan and enter the amount in the passbook.

 (3)     Where the application is made by a person who has made subscriptions to the Fund on behalf of a minor of whom he is the guardian, he shall furnish a certificate in the following form, namely:- “Certified that the amount for which loan is applied for is required for the use of………………..who is alive and is still a minor”.

 (4)     A subscriber shall not be entitled to get a fresh loan so long as earlier loan has not been repaid in full together with interest thereon.

  11.    Repayment of loan and interest:- (1) The principal amount of a loan under this Scheme shall be repaid by the subscriber before the expiry of thirty six months from the first day of the month following the month in which the loan is sanctioned. The repayment may be made either in one lump sum or in two or more monthly installments within the prescribed period of thirty-six months. The repayment will be credited to the subscriber’s account.

 (2)     After the principal of the loan is fully repaid, the subscriber shall pay interest thereon in not more than two monthly installments at the rate of two per cent per annum of the principal for the period commencing from the first day of the month following the month in which the loan is drawn upto the last day of the month in which the last installment of the loan is repaid.      

Provided that where the loan is not or is repaid only in part within the prescribed period of thirty six months, interest on the amount of loan outstanding shall be charged at six per cent per annum instead of at one per cent per annum from the first day of the month following the month in which the loan was obtained to the last day of the month in which the loan is finally repaid.

(3) The interest on the amount of loan outstanding under the proviso to sub-paragraph (2) and any portion of interest payable, but not paid, on any loan, the principal amount of which has already been repaid within the prescribed period of thirty six months, may, on becoming due, be debited to the subscriber’s account.

(4) The interest recoverable shall accrue to the Central Government.

12.    Nomination and repayment after death of subscriber: - (1) A subscriber to the Fund may nominate in Form G or, as near thereto as possible, one or more persons to receive the amount standing to his credit in the event of his death before the amount has become payable or, having become payable, has not been paid.

(2)     No nomination shall be made in respect of an account opened on behalf of a minor.     

(3)     A nomination made by a subscriber may be cancelled or varied by a fresh nomination in Form F or, as near thereto as possible, by giving notice in writing to the Accounts Office in which the account stands.        

4)      Every nomination and every cancellation or variation thereof shall be registered in the Accounts Office and shall be effective from the date of such registration, the particulars of which shall be entered in the passbook.        

(5)     If any nominee is a minor, the subscriber may appoint any person to receive the amount due under the account in the event of the death of the subscriber during the minority of the nominee.        

(6)     Notwithstanding the provisions contained in paragraph 9-        

(i)      If a subscriber to an account in respect of which a nomination is in force dies, the nominee or nominees may make an application in Form G or, as near thereto as possible, to the Accounts Office together with proof of death of the subscriber and on receipt of such application all amounts standing to the credit of the subscriber after making adjustment, if any, in respect of interest on loans taken by the subscriber shall be repaid by the Accounts Office itself to the nominee or nominees. Provided that if any nominee is dead, the surviving nominee or nominees shall, in addition to the proof of death of the subscriber, also furnish proof of the death of the deceased nominee.        

(ii) Where there is no nomination in force at the time of death of the subscriber, the amount standing to the credit of the deceased after making adjustment, if any, in respect of interest on loans taken by the subscriber, shall be repaid by the Accounts Office to the legal heirs of the deceased on receipt of application in Form G in this behalf from them.        

Provided that the balance upto Rs. 1 lakh may be paid to the legal heirs on production of (i) a letter of indemnity, (ii) an affidavit, (iii) a letter of disclaimer on affidavit, and (iv) a certificate of death of subscriber, on stamped paper, in the forms as in Annexures to Form G.         

(7)  A subscriber to the fund cannot nominate a trust as his nominee.

13.    Power to relax:- Where the Central Government is satisfied that the operation of any of the provisions of this Scheme causes undue hardship to a subscriber, it may, by order for reasons to be recorded in writing, relax the requirements of that provision in a manner not inconsistent with the provisions of the Act.

SCHEDULE

 

Rates of interest payable in PPF accounts as fixed from time to time since the introduction of the scheme.

 

Year

Rate of interest (p.a.)

1968

4.8%

1969-70

4.8%

1970-71

   5%

1971-72

   5%

1972-73

   5%

1973-74

5.3%

From 1.4.1974 to 31.7.1974

5.8%

From 1.8.1974 to 31.3. 1975

   7%

1975-76

   7%

1976-77

   7%

1977-78

7.5%

1978-79

7.5%

1979-80

7.5%

1980-81

   8%

1981-82

8.5%

1982-83

8.5%

1983-84

   9%

1984-85

9.5%

1985-86

 10%

From 1.4.1986 to 31.3.1999

 12%

From 1.4.1999 to 14.1.2000

 12%

From 15.1.2000 to 28.2.2001

 11%

From 1.3.2001 to 28.2.2002

9.5%

From 1.3.2002 to 28.2.2003

   9%

From 1.3.2003 to 30.11.2011

   8%

From 1.12.2011 to 31.3.12

8.60%

From 1.04.2012 to 31.3.2013

8.80%

From 1.04.2013 to 31.03.2016

8.7%

From 1.04.2016 to 30.09.2016

8.1%

From  1.10.2016 to 31.03.2017

8.0%

From 01.04.2017 to 30.06.2017

7.9%

From  01.07.2017 to 31.12.2017

7.8%

From  01.01.2018 to 30.09.2018

7.6%

From  01.10.2018 onwards

8.0%

 

 SB Order No.11/2014 issued vide DG Posts Letter No. 32-01/2014 dated 22.09.2014

 Subject: -      Extension of PPF Scheme to private sector banks.

            The undersigned is directed to say that this office has received some complaints regarding non transfer of their PPF Account from Post office to Private sector banks and vice versa.  The matter was referred to Min. of Finance, Department of Economic Affairs [MOF (DEA)] for clarification. MOF (DEA) has forwarded copies of Gazette notifications to this office wherein MOF (DEA) had authorized some branches of ICICI Bank Ltd., IDBI Bank Ltd., HDFC Bank Ltd. and UTI Bank Ltd. (Axis Bank Ltd.) to operate PPF accounts under PPF Scheme. Copies of MOF (DEA) Gazette notifications no. F.7/3/2005-NS.II dated 14.06.2005 and 29.08.2005 are also enclosed.

  2.       In view of above, now PPF Account can be transferred from Post office to the branches of private banks mentioned in above Gazette notifications and vice versa and procedure prescribed for the transfer of PPF A/c from Head Post Office (HPO) to Nationalized Banks and vice versa will also be applied for transfer to these designated branches of Private Banks. It is, therefore, requested to circulate these notifications to all field units for information and necessary action.

 
 
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