New Delhi, Feb 26: The Public Provident Fund (PPF) is one of the most popular investment options in view of investing with the purpose of saving taxes. There is a proposal to change a few rules and bring a few new ones in PPF. Also Read - Will Your In-Hand Salary Increase This Month? Here is How to Calculate
According to a report in Financial Times, the Centre has mooted a proposal to merge the Government Savings Certificates Act, 1959 and the Public Provident Fund (PPF) Act, 1968, with the Government Savings Banks (GSB) Act, 1873. (Also read: EPFO Lowers Interest Rates From 8.65% to 8.55%) Also Read - 7th Pay Commission Latest News: Govt Says Employees' PF Contribution Can go More Than Just 10%
A notification said that existing protections have been retained under the Government Savings Promotion Act. It said that no benefits given to investors have been taken away. There was concern that the government might take away the protection from attachment of PPF account under any court order. The notification said there was no plan to take away the protection. Also Read - PM Garib Kalyan Yojana: FM Announces Rs 2500 Crore EPF Support For Businesses, Workers
Under the present Act, the account could not be close before five years, even in the case of any emergency. However, the proposed amendment entails allowing investors to withdraw their money in case of emergency. The emergency includes medical bills and higher education needs.
In the proposed Act, the culture of savings will be promoted among children. Under the current Act, an Indian citizen can open a PPF account and another account in the name of minors; however, the maximum investment limit cannot be above Rs 1.5 lakh. Also, there is no evidence that deals with investment from differently-abled people. The new Act will have provisions to deal with these issues.
Interest rate in PPF is 7.6 per cent. Experts say that it is advisable to invest in the scheme as it builds a tax-free retirement fund for investors. Also, the investment gives a benefit in income tax under Section 80C. While EPF gives better returns than PPF, the self-employed don’t have that option.