If you have opened two or more Public Provident Fund (PPF) accounts on or after December 12, 2019, then it will be closed without any interest payment. Further, there will be no chance of merger of such PPF accounts.
The Ministry of Finance’s Department of Economic Affairs (Budget Division) directed not to send any proposal for consideration of merging, i.e., amalgamation of PPF Accounts formed under the PPF Rules 2019.
Department of Posts in its latest circular stated:
“In case any one of the PPF accounts or all the PPF accounts is/are proposed to be merged or amalgamated is / are opened on or after 12/12/2019 such account(s) shall be closed without any interest payment and no proposal should be sent to the Postal Directorate for amalgamation of such PPF Accounts.”
As per the Public Provident Fund (PPF) Scheme rules, an individual cannot have more than one account. However, many people still inadvertently end up opening more than one PPF account; they would have opened PPF accounts with two different banks or with a post office and a bank as well.
Say, for example, if a person has opened a PPF account in January 2015 and another PPF account in January 2020, in such case, these accounts cannot be merged and the account opened in January 2020 will be closed without bearing any interest.
In another case, if one account is opened in 2015 and another in 2018 by the same person, these accounts can be merged by requesting for amalgamation.
An individual cannot have more than one Public Provident Fund (PPF) account, according to the rules. If you have opened two or more Public Provident Fund (PPF) accounts on or after December 12, 2019, they will be closed without earning any interest. Furthermore, such PPF accounts will not be merged.
Any tax-saving schemes require the investor to make a minimum deposit every financial year to ensure that the account remains active. Some of the schemes that require a minimum deposit every financial year are Public Provident Fund (PPF)
If you have not deposited any money into these accounts for the current financial year, then make sure you do it on or before March 31, 2022, or else your account will become inactive.
Do note that from FY 2021-22, an individual can opt for either the old/existing tax regime and avail existing tax exemptions and deductions.
Or opt for the new, concessional income tax regime and forgo most tax exemptions and deductions. However, even if you opt for the new tax regime, it is important to ensure that you have deposited the minimum contribution required to keep the account active.
Here is a look at the minimum amount you need to invest in tax-saving schemes to keep them active and what happens if you do not make the minimum contribution. (Do keep a tab on the minimum limits as it can be changed by regulators from time to time.)
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