Do not take tension if PPF account is closed, as it will be activated again immediately.
New Delhi. Public Provident Fund (PPF) is one of the most popular small savings schemes run by the government. In this you can take advantage by investing only Rs 500 every year, but many times it is seen that some people do not contribute continuously and their account gets closed. In such a situation, it will have to be started again, about which we are going to tell in our report.
How is the account closed?
If you fail to deposit at least Rs 500 annually in your PPF account, your account will become inoperative. However, even when inoperative, your PPF account continues to earn interest every year.
Disadvantages of Inoperative PPF Account
There are many types of losses due to PPF account being inactive. For the number of years your account remains closed, you will have to pay the penalty for that number of years. Also you do not get loan on PPF.
how to activate ppf account
If you want to activate or reactivate your PPF account, you need to visit your nearest branch or post. Then one has to apply there for the same. Also, a penalty of Rs 500 + Rs 50 in multiples of years of inactivity of the PPF account will have to be paid.
For example, if your PPF account was closed for four years, you will have to pay a penalty of (500*4) Rs 2000 and (50*4) Rs 200. Along with this, you will also have to pay a minimum PPF contribution of Rs 500 for the current financial year.
If it has been more than 15 years since you opened the PPF account, then the account cannot be opened again.
tax exemption on ppf investment
PPF is a very good investment plan and the interest is sometimes slightly higher than FD. At present, the government is paying 7.1 percent interest on PPF. On investing in this, a person gets a rebate of up to Rs 1.50 lakh under Section 80C of Income Tax.