Govt proposes permitting premature closure of PPF account

NEW DELHI: The government proposes to permit premature closure of Public Provident Fund (PPF) accounts and allow opening of small financial savings accounts within the identify of adlescent, the finance ministry said on Tuesday.
The legislative adjustments proposed within the Finance Bill 2018 are aimed toward including flexibility in operation of the account below Small Savings Schemes (SSS), it said.

Dismissing issues expressed within the sure segment of media, the ministry said that every one present protections were retained whilst consolidating PPF Act below the proposed Government Savings Promotion Act.

"No existing benefits to depositors are proposed to be taken away through this process," it said, including that the proposal is to merge Government Savings Certificates Act, 1959 and Public Provident Fund Act, 1968 with the Government Savings Banks Act, 1873.

It additional said that with the exception of making sure present advantages, sure new advantages to the depositors were proposed below the bill.

"The main objective in proposing a common Act is to make implementation easier for the depositors as they need not go through different rules and Acts for understanding the provision of various SSS, and also to introduce certain flexibilities for the investors," it said.

In order to remove present ambiguities because of more than one Acts and regulations for SSS and additional improve the objective of "Minimum Government, Maximum Governance", the federal government has proposed merger of the 2 rules with the Government Savings Banks Act, 1873, the ministry said.

Benefits of premature closure of Small Savings Schemes would be presented to take care of clinical emergencies, and better training needs amongst others, it said.

"Another benefit, investment in Small Savings Schemes can be made by Guardian on behalf of minor(s) under the provisions made in proposed bill," the release said.

Apart from making sure present advantages, sure "new benefits" to the depositors were proposed below the bill.

Bill also proposes allowing depositor to near PPF account earlier than five years in exigencies.

"To make provisions for premature closure easier in respect of all schemes, provisions could now be made through specific scheme notification," the ministry said.

Currently, the PPF account cannot be closed in advance earlier than finishing touch of five financial years.

The amended legislation would also permit the federal government to position in place mechanism for redressal of grievances and for amicable and expeditious agreement of disputes relating to Small Savings.

Apart from offering upper interest rates in comparison to financial institution deposits, probably the most small financial savings schemes also enjoy source of revenue tax advantages.

"No change in interest rate or tax policy on small savings scheme is being made through this amendment. Apprehension that certain Small Savings Schemes would be closed is also without basis," the ministry added.

Small Savings Schemes come with Post Office Savings Account, National Savings Monthly Income (Account), National Savings Recurring Deposit, PPF and Sukanya Samriddhi Account.
Govt proposes permitting premature closure of PPF account Govt proposes permitting premature closure of PPF account Reviewed by kailash soni on February 14, 2018 Rating: 5
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