According to Indian Income Tax Act, there are so many schemes for individuals in respect of tax saving. Public Provident Fund is one of those saving schemes. Please read the following terms to understand this scheme in better way:-

Q. What is Public Provident Fund Account?

Ans. The Public Provident Fund Scheme is a statutory Scheme of the Central Government framed under the provisions of the Public Provident Fund Act’1968. Under this scheme Public Provident Fund Accounts are opened. Main purpose to open these account is to save Income Tax under Chapter VI-A of Income Tax Act, by Individual Taxpayer.

Q. Where can I open Public Provident Fund Account?

Ans. You can open Public Provident Fund Account with some Selected Branch of State Bank of India and other authorized banks  and Post Office.

Q. I am having a Public Provident Fund Account with State Bank of India, Mehrauli, New Delhi – 110030. Can I open another Public Provident Fund Account in my name with any other branch of State Bank of India or Post Office?

Ans. No, you can not open more than one Provident Fund Account with State Bank of India or Post Office or with any authorized bank.

Q. How many times, I can deposit the money during a financial year in my Public Provident Fund Account?

Ans. You can deposit Provident Fund Amount, maximum 12 times in a financial year. There is no objection to pay more than one installment of subscription in a month subject to a limit of 12 deposits during a financial year.

Q. Should I deposit a fixed amount every year in  my Public Provident Fund Account?

Ans. No, you can deposit any amount in your Public Provident Fund Account according to your convenient subject to the limits determined by Public Provident Fund Scheme.

Q. What is the maximum limit of amount to be deposited in Provident Fund Account?

Ans. Maximum amount of deposit under this scheme was Rs.1,00,000/= from F.Y. 2010-11 to F.Y.2013-14. With effect from financial year 2014-15 the deposit limit is increased from Rs.1,00,000/= to Rs.1,50,000/=.

Q. What is the Minimum amount which I should deposit in Public Provident Fund Account in a financial year ?

Ans. You must deposit a minimum amount of Rs.1000/= during a financial year.

Q. Should I deposit money in my Public Provident Fund Account every year?

Ans. Yes, you must deposit minimum amount of Rs.1000/= every year otherwise you will have to penalty 50/= per year to continue your Public Provident Fund Account.

Q. Can I deposit whole amount in cash in my Public Provident Fund Account irrespective of any amount?

Ans. Yes you can deposit whole amount in cash in your Public Provident Fund Account whether it is Rs.500/= or Rupees One lac fifty thousand.

Q. What is the maturity period Public Provident Fund Account?

Ans. 15 years. You can withdraw the entire amounts to your credit, after adjustments of loan or other dues if any. For example you opened your account on 15.01.2002; you have to maintain your account till 31.03.2012. According to above example, you can close your account any time after 31.03.2017. It means you have to maintain you account for 15 continuous financial years.

Q. Can I continue my Public Provident Fund Account after 15 year also?

Ans. Yes, you can continue your Public Provident Fund Account after 15 years also. You can request your bank or post office to extend your account for another 5 years. The same process can be followed after every 5 years.

Q. Can I close the my Public Provident Fund Account before maturity time?

Ans. Yes, you can close your Public Provident Fund Account before the stipulated period i.e. before 15 years from the date of opening of the account subject to certain terms and conditions.

Q. Is the interest on Public Provident Fund Taxable?

Ans. No, the interest on Public Provident Fund is not taxable. It is totally tax free.

Q. I am employed with some company. I am already paying my contribution under Employee’s Provident Fund Scheme. Can I open a Public Provident Fund Account?

Ans. Yes, you can open a Public Provident Fund Account even you are paying your contribution under Employee’s Provident Fund Scheme.

Q.  Can I transfer my Public Provident Fund Account to any other bank or post office?

Ans. Yes, you are entitled to have your account transferred to any branch or from post office to State Bank of India or State Bank of India to Post Office.

Q. How should I show the interest earned on Public Provident Fund in my Personal Income Tax Return?

Ans. You need not to show this income in calculation of income tax but you have to show it separately under tax free income.

Q. I am not income tax payee. Can I open a Provident Fund Account?

A. Yes, any individual can open a Public Provident Fund Account even you are not income tax payee.

Q. Can I nominate any person in respect of my Public Provident Fund Account?

Ans. Yes, you can nominate one or more persons to receive any final payment, which is due to you, in the event of your death.

Q. Can I take loan against my deposits with Public Provident Fund Account?

Ans. Yes you can avail the facility of loan against your deposits in Public Provident Fund Account according to the Public Provident Fund Scheme.

Q. Can I withdraw some amount against my deposits with Public Provident Fund Account?

Ans. Yes you can withdraw the money against your deposits in Public Provident Fund Account according to the Public Provident Fund Scheme.

Q. If the account holder dies before the maturity period i.e. 15 years of Public Provident Fund Account, when the nominee shall receive the money?

Ans. In case of death of the account holder, the nominee can receive the money even before 15 years. These receipts shall be totally tax free.

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