Govt sets terms for premature PPF withdrawal- Business News
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Govt sets terms for premature PPF withdrawal

"A subscriber shall be allowed premature closure of his account or account of a minor of whom he is the guardian on ground that amount is required for treatment of serious ailments or life-threatening diseases of the account holder, spouse or dependent children on production of supporting documents from competent medical authority," the Finance Ministry said in a notification.

BT Online   
  • New Delhi,  June 21, 2016  
  • |  
  • UPDATED   15:32 IST

In a move that will bring relief to lakhs of Public Provident Fund (PPF) subscribers, the finance ministry said subscribers of the fund can prematurely close the deposit scheme after completing five years for reasons such as higher education or expenditure towards medical treatment.

"A subscriber shall be allowed premature closure of his account or account of a minor of whom he is the guardian on ground that amount is required for treatment of serious ailments or life-threatening diseases of the account holder, spouse or dependent children on production of supporting documents from competent medical authority," the Finance Ministry said in a notification.

The allowance will be applicable to the requirement of higher education of the account holder or the minor account holder on production of documents and fee bills in confirmation of admission in a recognised institution in India or abroad.

It, however, added that such premature closure shall be allowed only after the account has completed five financial years.

The tax-free savings funds was introduced by the finance ministry in 1968 and income tax deduction under section 80C can be availed under deposits made under PPF scheme.

A PPF account can be opened for 15 years. After 15 years, the account can be extended for five years.