Updated: April 28, 2021 5:41:30 pm
A Public Provident Fund or PPF is a long-term tax-saving instrument that gives a fixed rate of interest annually on the amount that you invested during the year. It comes with a lock-in period of 15 years.
In a PPF account, the interest you earn is tax-free and the amount that is deposited during the financial year can be claimed under Section 80C.
The current PPF interest rate stands at 7.1 per cent per annum and it is one of the high-yielding small saving schemes backed by the government.
Now, keeping a PPF account active is essential for making your tax-saving deposits. A minimum deposit of Rs 500 is necessary during a financial year to keep it active.
But what happens in case you forget to make a minimum deposit in your PPF account and it becomes inactive?
Here’s how to reactivate your PPF account:
- A written application will be required to be sent to the bank or post office’s branch where the account was opened requesting them to revive your deactivated PPF account. The application has to be made at any time during the 15-year period of the account.
- The depositor will also have to make a minimum deposit plus the penalty for nonpayment. As discussed above, in the financial year a minimum amount of Rs 500/fiscal needs to be deposited, along with this a penalty of Rs 50 for each financial year in which the account was inactive has to be paid to the financial institution.
- A cheque of the same then has to be submitted to the branch.
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