Big blow of Finance Ministry: No two or more PPF accounts in one name, know what will be the effect on you

The Finance Ministry has given a big blow to those investing in the tax saving scheme Public Provident Fund (PPF). The Department of Economic Affairs, Ministry of Finance has clarified that two or more PPF accounts opened by the same person on or after December 12, 2019, cannot be merged.

The department has issued an Office Memorandum (OM) asking the institutions operating PPF accounts not to send requests for merger of PPF accounts opened after this date. Behind this, the department has cited the PPF’s 2019 rules. After the OM of the Department of Economic Affairs, the post office has issued a circular. It has been said in this circular that two or more PPF accounts opened by the same person on or after December 12, 2019, except one, will be closed. Also, no interest will be paid on the accounts to be closed.

understand effect by example

A person has opened one PPF account in January 2015 and another PPF account in January 2020. In such a situation, the PPF account opened in January 2020 will be closed. Also, no interest will be paid on this account. If a person has opened one account in 2015 and another account in 2018 then both the accounts will be merged on request.

Interest of post office savings schemes will be deposited directly in the account

The post department has changed the rules regarding interest received in Monthly Income Scheme (MIS), Senior Citizen Savings Scheme (SCSS) or Time Deposit (TD). In the latest circular of the post department, it has been said that the interest received on MIS, SCSS or TD accounts will be deposited directly into the savings accounts of investors from April 1. If an investor has not yet linked the savings account of the bank or post office with his savings scheme, then link it before March 31, 2022.

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If this is not done, the interest received after April 1 will be deposited in the miscellaneous office account of the post office. Once the interest amount is credited to the Miscellaneous Office Account, it will be paid only through Post Office Savings Account or Cheque. After 1st April, interest on MIS, SCSS or TD will not be paid in cash from miscellaneous office account.

Link account like this

Post Office Savings Account: For this the investor has to fill and submit the SB-83 form. MIS, SCSS or TD account passbook and post office savings account passbook will have to be produced at the post office for verification at the time of form submission.

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Bank Savings Account: For this the investor has to submit the ECS-1 form. Along with this a canceled check and a copy of the first page of the savings account will have to be attached. Along with this, a copy of the passbook of MIS, SCSS or TD account will also have to be given in the post office.