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Post Office Monthly Income Schemes

Interest Payable, Rates Periodicity etc.

8% per annum payable monthly i.e. Rs. 130/- will be paid every month on a deposit of Rs. 12,000/-. In addition a bonus 10% also payable on maturity i.e. Rs. 1,200/- will be paid as bonus after 6 years for deposit of Rs. 12,000/-

Investment Limits & Denominations

Minimum Rs. 6000/-. Maximum Rs. 3 lakhs in single account and Rs. 6 lakhs in joint account.

Salient Features Including Tax Rebate

Maturity period is 6 years. Can be prematurely encashed after one year at 8% discount. However, no such deduction shall be made if the account is closed after three years from the date of opening of such account. Interest is exempt under Sec. 80-L of I.T. Act.

Small Savings

"Public Provident Fund (PPF) account of NSO is perhaps the most beneficial avenue of investment not only from the point of view of tax benefits but from the angle of rate of return on such tax-savings instruments for all categories of tax payees-the self employed, salaried class and the retired also. The Public Provident Fund (PPF) Account - A long term savings scheme of NSO introduced by the Govt. of India in 1968 is still first among equals, indeed a matchless investment scheme for all." says an eminent investment advisor.

Who can open an account?

A P.P.F Account can be opened by an individual on his own behalf or on behalf of a minor of whom he is the guardian or on behalf of H.U.F. of which he is a member or on behalf of an association of persons or a body of individuals consisting only of husband and wife governed by the system of community of property in force in the Union Territories of Dadra and Nagar Haveli and Goa, Daman and diu. A person having a GPF Account can also open a P.P.F Account.

Where to open an account?

The account can be opened in a Head Post Office or in a branch of the S.B.I. or its subsidiaries (excluding offices managed by single officer or clerk) and also at specified branches of some other Nationalised Banks

Limits & Deposits

Minimum subscription in a financial year is Rs.500/- and maximum of Rs.70,000/-. Subscription can be paid in lumpsum or in convenient installments not exceeding 12 (twelve) in a year and in multiples of Rs.5/-. Initial pay of Rs. 500/- to be paid by cash and thereafter all payments by cheque only in multiples of 100/- (Minimum Rs. 500/-) Rate of Interest Balance in the P.P.F. earn interest at the rate fixed by the Government from time to time. The rate of interest at present is 8% p.a.

Withdrawal

A withdrawal is permissible every year from the seventh financial year of the date of opening of the account, if an amount not exceeding 50% of the balance at the end of the 4th proceeding year or the year immediately proceeding the year of the withdrawal, whichever is lower, less the amount of loan if any.

Facility for Loan

The first loan can also be taken in the third financial year from the end of the financial year which the account was opened, upto 25% of the amount at credit at the end of the first financial year. This facility however can be availed of only before expiry of 5 years from the end of the year in which the initial subscription was made. The loan is repayable either in lumpsum or in convenient installments numbering not more than 36. Interest at 1% would be charged if loan is repaid in 36 months. Such interest should be paid in not more than 2 monthly installments. If the amount of loan is not repaid within 36 months, interest on outstanding amount of loan would be charged at 8%.

Tranfer

The account can be transferred at the request of the subscriber from one office to another, including from Bank to Post Office and vice-versa all over the country.

Tax Benefits

Subscriptions to the PPF qualify for Income Tax rebate under Section 88' of I.T. Act, along with other specified securities. The interest credited to the Fund is not counted as income for the purpose of income tax. The amount including interest standing to the credit of the subscriber in the Fund is also totally exempt from wealth tax.

Additional Facility

Subscriber can extend 3 times his account beyond 15 years i.e. total shall not exceed 30 years for which you are required to submit party's letter in prescribed form "H". In the event of a subscriber opting to subscribe for the aforesaid block period, he shall be eligible to make partial withdrawal not exceeding one, every year, subject to that the total amount withdrawn during one block period shall not exceed 60% of the balance at credit at the commencement of the said period. The subscriber who wished to retain only the balance of his account beyond 15 years (till it is needed) can do so and is permitted to make one withdrawal each year, till the entire balance is withdrawn.

Nomination

A subscriber may nominate one or more persons to receive the amount standing to his credit in the event of his death. No nomination can, however, be made in respect of an account opened on behalf of a minor. In the event of the death of the subscriber, the amount standing to his credit can be repaid to his nominee or legal heir, as the case may be, even before the expiry of fifteen years. Legal heirs can claim the amount upto Rupees One lakh without production of succession certificate after observing certain formalities

Payment Default

P.P.F. account can be revived by paying a fee of Rs.10/- for each year of default along with the arrear subscription of Rs.100/- for each year of such default.

Freedom from Court Attachment

The credit balance in P.P.F. account is not subject to attachment under an order or decree of court with respect of any debt or other liability

15 - Year Public Provident Fund Account

Interest Payable, Rates Periodicity etc.
11% per annum for 1995-96 compounded yearly.

Investment Limits & Denominations
Minimum Rs. 100/-. Maximum Rs. 60,000/- in a Financial Year. Deposits can be made in lumpsum or in monthly installments.

Salient Features Including Tax Rebate
Deposits are qualified for Income Tax rebate under Section 88 of I.T. Act. Deposits completely exempted from Wealth Tax. Interest is completely tax free. Withdrawal is permissible every year from 7th financial year. Loan facility available from the 3rd financial year. No attachment under court decree.