Public Provident Fund Scheme, 1968

The Public Provident Fund Scheme, 1968 notified by the government and as amended from time to time. The scheme of 1968 is replaced by a new Public Provident Fund Scheme, 2019 effective from 12.12.2019.

The new Scheme of 2019 overrides all the rules and schemes made earlier for Public Provident Fund or PPF.

PUBLIC PROVIDENT FUND SCHEME, 1968

GSR 1136, DATED 15-6-1968

In exercise of the powers conferred by section 3 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government hereby makes the following Scheme, namely:—

Short title and commencement.

1. (1) This scheme may be called the Public Provident Fund Scheme, 1968.

(2) It shall come into force on 1st July, 1968.

Definitions.

2. In this Scheme unless the context otherwise requires,—

(a)		"Aadhaar number" means an identification number as defined in clause (a) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016);
(aa)		"Account" means a Public Provident Fund Account under this Scheme;
(b)		"accounts office" means an office or branch of the State Bank of India, any subsidiary bank of the State Bank of India (excluding a pay-office, a sub pay-office or any other office managed by a single officer or clerk) and any other office authorised by the Central Government to receive subscriptions under the Scheme;
(c)		"accounts officer" means the person who, for the time being, is in charge of an accounts office;
(d)		"Act" means the Public Provident Fund Act, 1968 (23 of 1968);
(e)		"Form" means a form appended to this Scheme;
(ee)		"guardian", in relation to a minor, means—

(i)		father or mother; and
(ii)		where neither parent is alive, or where the only living parent is incapable of acting, a person entitled under the law for the time being in force to have care of the property of the minor;

(f)

"year" means the financial year.

Limits of subscription.

3. (1) Any individual may, on his behalf or on behalf of a minor of whom he is the guardian, subscribe to the Public Provident Fund (hereinafter referred to as the "Fund") any amount not less than Rs.500 and not more than Rs.1,50,000 in a year.

(2) Omitted

(3) Non-Resident Indians (NRIs) are not eligible to open an account under the Public Provident Fund Scheme :

Provided that if a resident who opened an account under this scheme, subsequently becomes a non Resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes a non-resident and interest with effect from that date shall be paid at the rate applicable to the Post Office Saving Account up to the last day of the month preceding the month in which the account is actually closed.

Manner of making the subscription .

4. (1) Every individual desirous of subscribing to Fund under the Scheme for the first time either on his own or on behalf of a minor of whom he is the guardian shall apply to the Accounts Office in Form A form, together with the amount of initial subscription which shall be minimum of Rs.100/-.

(2) On receipt of an application under sub-paragraph (1), the Accounts Office shall open an account in the name of the subscriber and issue a passbook to him, wherein all amount of deposits, withdrawals, loans and repayment thereof together with interest due shall be entered over the signature of the Accounts Officer with the date stamp:

Provided that in case of Post Offices working on Core Banking solution platform, a statement of account shall be issued in place of passbook at the discretion of account holder.

(3) The subscriber shall deposit his subscription with the Accounts Office with challan in Form B, or as near thereto as possible and the counterfoil of the challan shall be returned to the depositor by the Accounts Office, duly evidenced by receipt. And in case of deposits made by cheque or draft or pay order, the Accounts Office may issue a paper token to the depositor pending realization of the proceeds.

(4) Every subscription shall be made in cash or crossed cheque or draft or pay order in favour of the Accounts Office at the place at which that office is situated:

Provided that where the Account Office is working on Core Banking platform, every subscription shall be made either by cash, cheque, draft, pay orders or any electronic mode in any Account Office working on Core Banking Solution platform.

(5) Where a deposit is made by means of an outstation cheque or instrument, collection charges at the prescribed rate shall be payable along with the deposit and the date of realisation of the amount shall be the date of deposit.

Identification of Account holders.

4A. The Aadhaar number shall be the unique identifier for the purpose of establishing the identity of an account holder:

Provided that where Aadhaar number has not been assigned, the depositor shall submit proof of application of enrolment for Aadhaar:

Provided further that every depositor under this Scheme who has not given his Aadhaar number at the time of application for such deposit shall submit his Aadhaar number to the Post Office Savings Bank or Accounts Office concerned, on or before the 31st day of December, 2017.

Number of subscriptions.

5. The subscriptions, which shall be in multiples of Rs. 5, may, for any year, be paid into the account in one lump sum or in instalments not exceeding twelve in a year.

Transfer of accounts.

6. A subscriber may apply for transfer of his account from one accounts office to another accounts office.

Issue of duplicate pass book, etc.

7. (1) In the event of loss or destruction of a pass-book issued by an accounts office, the office may, on an application made to it in this behalf, and on payment of rupee one by the subscriber, issue a duplicate thereof to him.

(2) A subscriber who fails to subscribe in any year according to the limits specified in paragraph 3, may approach the accounts office for condonation of the default, on payment, for each year of default, a fee of Rs. 50 along with arrears subscription of Rs. 500 for each such year.

Interest.

8. Interest at the rate, notified by the Central Government in the Official Gazette from time to time, shall be allowed for each calendar month on the lowest balance at credit of an account between the close of the fifth day and the end of the month and shall be credited to the account at the end of each year:

Provided that where the interest to be credited contains a part of a rupee, then, if such part is fifty paise or more, it shall be increased to one complete rupee, and if such part is less than fifty paise, it shall be ignored

Withdrawal from the Fund.

9. (1) Any time after the expiry of five years from the end of the year in which the initial subscription was made, a subscriber may, if he so desires, apply in Form C, or as near thereto as possible, together with his pass book to the accounts office, for withdrawing from the balance to his credit and amount not exceeding fifty per cent of the amount that stood to his credit at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower, less the amount of loan, if any, drawn by him under paragraph 10 and which remains to be repaid:

Provided that not more than one withdrawal shall be permissible during any one year.

(2) On receipt of an application under sub-paragraph (1), the accounts office may, after satisfying itself that the amount of withdrawal applied for is not in excess of the limit prescribed in sub-paragraph (1) and that the applicant has, till the date of application, been subscribing according to the limit specified in paragraph 3, subject to the provisions of sub-paragraph (4), permit the withdrawal and enter the amount withdrawn in the pass book.

(3) Notwithstanding the provisions of sub-paragraph (1) any time after the expiry of 15 years from the end of the year in which the initial subscription was made by him, a subscriber may, if he so desires, apply in Form C or as near thereto as possible together with his pass book to the accounts office for the withdrawal of the entire balance standing to his credit and the accounts office, on receipt of such an application from the subscriber, shall subject to the provisions of sub-paragraph (4) allow the withdrawal of the entire balance (together with interest up to the last day of the month preceding the month in which the application for withdrawal is made) after making adjustments, if any, in respect of any interest due from the subscriber on loans taken by him and close his account :

Provided that a subscriber may, if he so desires, make withdrawal of the amount standing to his credit, from time to time, in instalments not exceeding one in a year.

(3A) Subject to the provisions of sub-paragraph (3), a subscriber may, on the expiry of 15 years from the end of the year in which the initial subscription was made but before the expiry of one year thereafter, exercise an option with the accounts office in Form H, or as near thereto as possible, that he would continue to subscribe for a further block period of 5 years according to the limits of subscription specified in paragraph 3.

(3B) In the event of a subscriber opting to subscribe for the aforesaid block period, he shall be eligible to make partial withdrawals not exceeding one every year by applying to the accounts office in Form C, or as near thereto as possible, subject to the condition that the total of the withdrawals, during the 5 years block period, shall not exceed 60 percent of the balance at his credit at the commencement of the said period.

(3C) A subscriber shall be allowed premature closure of his account or the account of a minor of whom he is the guardian, on a written application to the Accounts Office, on any of the following grounds namely:—

(i) that the amount is required for the treatment of serious ailments or life threatening diseases of the account holder, spouse or dependent children or parents, on production of supporting documents from competent medical authority;

(ii) that the amount is required for 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 institute of higher education in India or abroad:

Provided that such premature closure shall be allowed only after the account has completed five financial years:

Provided further that premature closure under this sub-paragraph shall be subject to deduction of such amount which shall be equivalent to one per cent less interest on the interest rates as applicable from time to time in the table payable on the deposits held in the account from the date of opening of the account till the date of such premature closure, calculated in accordance with the sample calculation as shown in the table :

TABLE

Calculation showing the interest payable to depositor

Year (1)	Opening Balance (2)	Assumed Fresh Deposit (3)	Total Amount (4)	Rate of Interest (5)	1% less on the applicable rate of interest (6)	Interest accured (7)	Outstanding Balance (8)
2006-07	-	1000.00	1000.00	8.00	7.00	70.00	1070.00
2007-08	1070.00	500.00	1570.00	8.00	7.00	109.90	1679.90
2008-09	1679.90	500.00	2179.90	8.00	7.00	152.59	2332.49
2009-10	2332.49	700.00	3032.49	8.00	7.00	212.27	3244.77
2010-11	3244.77	600.00	3844.77	8.00	7.00	269.13	4113.90
2011-12	4113.90	1000.00	5113.90	8.60	7.60	388.66	5502.56
2012-13	5502.56	1200.00	6702.56	8.80	7.80	522.80	7225.36
2013-14	7225.36	1500.00	8725.36	8.70	7.70	671.85	9397.21
2014-15	9397.21	1500.00	10897.21	8.70	7.70	839.09	11736.29
2015-16	11736.29	1000.00	12736.29	8.70	7.70	980.69	13716.99
Total		9500.00					13716.99

Note : A subscriber may at his option (to be exercised before the expiry of the first year of every extended block period) avail of this facility for a further block of 5 years on expiry of 20 years or on expiry of 25 years and so on, from the end of the year in which the initial subscription was made.

(4) Where the application is made by a person who has made subscription to the fund on behalf of a minor of whom he is the guardian, he shall furnish a certificate in the following form, namely:

“Certified that the amount sought to be withdrawn is required for the use of……………..who is alive and is still a minor”.

Loan.

10. (1) Not withstanding the provisions of paragraph 9, any time after the expiry of one year from the end of the year in which the initial subscription was made but before the expiry of five years from the end of the year in which the initial subscription was made, a subscriber may, if he so desires, apply in Form D, or as near thereto as possible, together with his pass book, to the accounts office for obtaining a loan consisting of a sum of whole rupees not exceeding twenty-five per cent of the amount that stood to his credit at the end of the second year immediately preceding the year in which the loan is applied for.

(2) On receipt of an application under sub-paragraph (1), the accounts office may, after satisfying itself that the amount of loan applied for is not in excess of the limit prescribed in sub-paragraph (1) and that the applicant has, till the date of application, been subscribing according to the limit specified in paragraph 3, subject to the provisions of sub-paragraph (3), sanction the loan and enter the amount in the pass book.

(3) Where the application is made by a person who has made subscriptions to the fund on behalf of a minor of whom he is the guardian, he shall furnish a certificate in the following form, namely: —

"Certified that the amount for which loan is applied for is required for the use of... who is alive and is still a minor."

(4) A subscriber shall not be entitled to get a fresh loan so long as an earlier loan has not been repaid in full together with interest thereon.

Repayment of loan and interest.

11. (1) The principal amount of a loan under this Scheme shall be repaid by the subscriber before the expiry of thirty-six months from the first day of the month following the month in which the loan is sanctioned. The repayment may be made either in one lump sum or in two or more monthly instalments within the prescribed period of thirty-six months. The repayment will be credited to the subscriber’s account.

(2) After the principal of the loan is fully repaid, the subscriber shall pay interest thereon in not more than two monthly instalments at the rate of two per cent per annum of the principal for the period commencing from the first day of the month following the month in which the loan is drawn up to the last day of the month in which the last instalment of the loan is repaid:

Provided that where the loan is not repaid or is repaid only in part within the prescribed period of thirty-six months, interest on the amount of loan outstanding shall be charged at six per cent per annum instead of at two per cent per annum from the first day of the month following the month in which the loan was obtained to the last day of the month in which the loan is finally repaid.

(3) The interest on the amount of loan outstanding under the proviso to sub-paragraph (2) and any portion of interest payable, but not paid, on any loan, the principal amount of which has already been repaid within the prescribed period of thirty-six months, may, on becoming due, be debited to the subscriber’s account.

(4) The interest recoverable shall accrue to the Central Government.

Nomination and repayment after death of subscriber.

12. (1) A subscriber to the Fund may nominate in Form E, or as near thereto as possible, one or more persons to receive the amount standing to his credit in the event of his death before the amount has become payable or, having become payable, has not been paid.

(2) No nomination shall be made in respect of an account opened on behalf of a minor

(3) A nomination made by a subscriber may be cancelled or varied by a fresh nomination in Form F, or as near thereto as possible, by giving notice in writing to the accounts office in which the account stands.

(4) Every nomination and every cancellation or variation thereof shall be registered in the accounts office and shall be effective from the date of such registration, the particulars of which shall be entered in the pass-book.

(5) If any nominee is a minor, the subscriber may appoint any person to receive the amount due under the account in the event of the death of the subscriber during the minority of the nominee.

(6) Notwithstanding the provisions contained in paragraph 9,—

(i ) if, a subscriber to an account in respect of which a nomination is in force dies, the nominee or nominees may make an application in Form G, or as near thereto as possible, to the accounts office together with proof of death of the subscriber and on receipt of such application all amounts standing to the credit of the subscriber after making adjustments, if any, in respect of interest on loans taken by the subscriber, shall be repaid by the accounts office itself to the nominee or nominees:

Provided that if any nominee is dead the surviving nominee or nominees shall, in addition to the proof of death of the subscriber, also furnish proof of death of the deceased nominee;

(ii ) where there is no nomination in force at the time of death of the subscriber, the amount standing to the credit of the deceased after making adjustment, if any, in respect of interest on loans taken by the subscriber, shall be repaid by the accounts office only to the legal heirs of the deceased on receipt of an application in Form G in this behalf from them:

Provided that the balance up to Rs. 1 lakh may be paid to the legal heirs on production of (i) a letter of indemnity; (ii) an affidavit; (iii) a letter of disclaimer on affidavit; and (iv) a certificate of death of subscriber, on stamped papers, in the forms as in Annexure to Form G.

(7) A subscriber to the Fund cannot nominate a trust as his nominee.

Power to relax.

13. Where the Central Government is satisfied that the operation of any of the provisions of this Scheme causes undue hardship to a subscriber, it may, by order for reasons to be recorded in writing, relax the requirements of that provision in a manner not inconsistent with the provisions of the Act.

Different Forms notified under the PPF Scheme, 1968 and their purposes

Form No.	Purpose
Form No-A	Application for opening a Public Provident Fund Account
Form No-B	Challan for deposit of money into Government account
Form No-C	Application form for withdrawals
Form No-D	Application for a loan
Form No-E	Nomination under the Public Provident Fund Scheme,1968
Form No-F	Cancellation or variation of nomination previously made
Form No-G	Application for withdrawals by nominees/ legal heirs
Form No-H	Application for continuance of account beyond 15 years+