On 21st Aug 2024, the GOI announced Guidelines for regularising accounts opened in deviation from Rules stipulated under National Small Savings Schemes. This only applies to irregular PPF accounts and not all PPF accounts. A clarification by SEBI Registered Investment Advisor Ajay Pruthi.
About the author: Ajay Pruthi is a fee-only SEBI registered investment advisor. He can be contacted via his website plnr.in. Ajay is part of the freefincal list of fee-only advisors and fee-only India.
Also by Ajay
What are irregular PPF accounts?
- If you are an NRI and have extended your PPF account beyond the initial 15-year period. If you are an NRI and you had opened a PPF account while your residential status was NRI (not residential Indian). Though the notification talks about only the extension of the NRI PPF account, this may happen in the future.
- If you have more than one PPF account in your name
- If you have more than one account in the name of a minor.
- Invested more than 1.5 Lakh in your account plus a minor account for which you are the guardian. That is If you have a PPF account and are depositing 1.50 Lakhs per annum in the PPF account. At the same time, you are the guardian of a minor PPF account and depositing an additional amount in the minor’s PPF account.
- If you have 3 PPF accounts (self, spouse, and minor) and the deposits are more than 3 Lakhs per annum across all accounts. Minor accounts may be considered irregular in this case. The maximum amount per pan number is 1.50 Lakhs, including the minor accounts from 1st Oct 2024.
You don’t have to worry if your account does not fall into one of the above categories. The new rules will NOT apply to you.
New PPF rules from 1st Oct 2024
- For Minors: All irregular accounts will earn interest at the Post Office Savings Account rate until the minor reaches the age of majority. The maximum amount per pan number is 1.50 Lakhs, including the minor accounts.
- For NRIs: All irregular accounts will cease to earn interest starting from 30th September 2024.