Public Provident Fund (PPF) is a government-backed small savings scheme with a 15-year lock-with tax benefits under Section 80C of the Income-tax Act, 1961. It allows partial withdrawals after five years for specific reasons like medical emergencies, home purchase, child’s education, etc. PPF interest rate is announced every quarter. It is currently 7.1 per cent. If the subscriber dies, the proceeds go to the nominee. If there is no nominee or legal heirs of the deceased subscriber, then the PPF amount will be distributed according to the succession laws.

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Benefits of Public Provident Fund (PPF)

PPF offers guaranteed returns with flexible investment and withdrawal options. A minor can also open an account, subject to the supervision of a guardian or parent. Additionally, account holders can take loans against their PPF account balance one year after the end of the financial year in which the account was opened. PPF has the EEE (Exempt-Exempt-Exempt) status, which means tax benefits for investments, interest income, and maturity proceeds.

Although the new tax regime eliminates the tax-saving benefits on deposits under section 80C of the Income-tax Act, PPF retains the tax exemption son interest income, and maturity proceeds. Thus, PPF continues to be a valuable option for investors due to its tax benefits, flexibility, and withdrawal options compared to other long-term investment products.

Documents Required For Withdrawals

To claim PPF balance after subscriber’s death, the claimant must submit the account holder’s death certificate, the nominee(s) or legal heir(s)’ identity proof, and proof of relationship with the deceased, such as a succession certificate, will, or a legal heir certificate along with the application form “G”.

Form Submission and Processing

The nominee or the legal heir must fill Form G, which includes the deceased’s name, PPF account number, and claimant details, a declaration, and an indemnity bond if there are multiple claimants or the amount is substantial and submit the details to the bank or the post office.

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The bank or post office verifies the claim, closes the PPF account, calculates the accumulated amount with interest, and transfers it to the heir’s account. Interest is paid until the month before closure. The PPF amount is tax-free for the nominee or heir. If multiple nominees are nominated, the balance is distributed according to the specified percentage.