The rate of interest on loans is 2 more than the interest offered on the

The rate of interest on loans is 2 more than the

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account. The rate of interest on loans is 2% more than the interest offered on the deposits. The loan sanctioned will always be 25% of the PPF balance in account at the end of the fiscal year that preceded 2 years. (ii) The principal amount is to be repaid within 36 months, either as lump sum or as periodic instalments. If the loan repayment crosses 36 months, the interest charged will be 6% more than the interest earned on the balance in the PPF account. (iii) If the loan is taken on behalf of a minor, then the guardian has to make a declaration that the money will be used for the benefit of the minor. (iv) Once the principal amount is paid, then only can you pay the interest on the loan amount. You cannot make the repayment of interest in more than two monthly instalments. 11. The borrower does not have to pledge his assets for obtaining a PPF loan. Only after repayment of the first loan can one apply for a second loan. 12. If fresh investments are made after maturity, the new deposits will be added to the balance held at the end of year 15 and interest will be calculated on the entire amount. The maximum total amount that can be withdrawn during these 5 years is limited to 60% of the balance in the account that existed at the beginning of the extension period. 13. If no fresh deposits are made during the period of extension, interest will be calculated based on the balance held at the end of the 15th year. 14. Amounts deposited in a spouse’s or child’s PPF account also qualify for tax breaks but not for parents or grandparents’ PPF accounts. But the maximum investment cap of Rs.1.5 lakhs applies to all contributions you make to your account, your minor child’s account and/or your spouse’s account, collectively. 15. The person making the contribution is eligible for tax deductions U/S 80C. For Example - You deposited money in your wife’s PPF account, it will be you who will be able to avail the tax deduction. 16. Grandparents cannot open PPF accounts in their grandchildren’s names. However, if both parents of the minor child die, the grandparents, as guardians, can open and operate a PPF account for the minor child. 17. It is not mandatory to name nominees for a PPF account. 18. A PPF account can also be opened by those who contribute to CPF / PF / GPF Fund. 19. A subscriber is now allowed premature closure of his account or the account of a minor of whom he is a guardian, on a written application to the Accounts Office, on any of the following grounds - (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.
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(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.
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  • Spring '14
  • Saving Schemes India

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