PPF account deactivated? Here’s how you can revive it

New Delhi: Public Provident Fund (PPF) has been the most favourite instrument for Indians for saving money for long-term goals because of the compounding benefit it provides and the  EEE (exempt-exempt-exempt) status. PPF provides exemption from tax at all three stages —at the time of making the investment, when interest is earned and on maturity.

PPF account comes with a lock-in period of 15 years.  The maturity date is calculated from the end of the financial year in which the deposit is made. For instance, if your first contribution was made on September 20, 2015, then the lock-in period will be calculated from March 31, 2016, and the year of maturity will be April 1, 2031.

PPF contribution:

The minimum annual contribution for PPF account is Rs 500 and maximum is Rs 1,50,000 per year. Subscriber should not deposit more than the maximum limit as excess amount neither earns any interest nor eligible for a rebate under the Income-tax Act.

Consequences of not depositing the minimum amount in PPF account:

In case you fail to make the minimum contribution, a penalty of Rs 50 along with an arrear subscription of Rs 500 for each year has to be paid. Besides penalty, the account will be treated as discontinued. This discontinued account cannot be closed before the maturity date. The subscriber can get back his amount invested in this account only the maturity period of 15 years expires.

If due to any reason, you miss or not able to put money into our PPF account in any subsequent financial year (April 1 to March 31), the account gets discontinued. The subscriber can get back his amount only after the expiry of the 15 year maturity period. Along with this amount, the subscriber will continue to receive interest on the amount in the account at a rate that is fixed by the government from time to time.

One important thing to note is that a discontinued account can not be closed before the maturity period of 15 years. In case, you wish you revive the discontinued account, you can do that any time before the account’s maturity date. You can check the maturity date from the PPF passbook. If the account is discontinued then the subscriber will not be allowed to open another PPF account.

How to revive dormant PPF account:

For the revival of an inactive PPF account, the account holder needs to make a written request to the bank or the post office branch where the account is located. The application can be made any time during the 15 year period of the account.
The investor will be required to deposit a minimum of Rs 500 for each financial year of the period when the account was inactive.

The cheque needs to be submitted to the branch along with the application. Also, to revive the account, the bank or post office charges a penalty of Rs 50 for each financial year in which the account was in an inactive state. The penalty
needs to be deposited along with the payment of arrears.

Once the application is submitted, the bank or post office scrutinises the application with their records. If the period of deposit (15 years) has elapsed, the account can’t be revived. However, one can access the maturity proceeds by paying the penalty.


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