THE PUBLIC PROVIDENT FUND SCHEME, 1968
[Issued vide Government of India, MOF (DEA) Notification No. GSR 1136 dated
15.6.1968 and further amended from time to time]
GSR 1136;- In exercise of the power conferred by Section 3 of the Public
Provident Fund Act, 1968 (23 of 1968), the Central Government hereby makes
the following scheme, namely:-
1. Short title and commencement:- (1) This scheme may be called the
Public Provident Fund Scheme, 1968.
(2) It shall come into force on Ist July, 1968.
2. Definitions:- In this scheme, unless the context otherwise requires:-
(a) ‘Account’ means a Public Provident Fund Account under this scheme.
(b) ‘Accounts Office’ means an office or branch of the State Bank of India,
may subsidiary bank of the State Bank of India (excluding a pay office, a
sub pay office or any other office managed by single officer or clerk) and
any other office authorized 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 minor;
(f) ‘Year’ means the financial year (Ist April to 31
3. Limit of subscription:- (1) Any individual may, on his own behalf or on
behalf of a minor of whom he is the guardian, subscribe to the Public Provident
Fund (thereafter referred to as the fund) any amount not less than Rs. 500
and not more than Rs. 70,000 in a year.
(2) Notwithstanding anything contained in sub-paragraph (1), an individual
may also subscribe to the fund on behalf of:-
(a) a Hindu Undivided Family, or
(b) an association of persons or a body of individuals consisting in either
case, only of husband and wife governed by the system of community
of property in force in the State of Goa and the Union territories of
Dadra and Nagar Haveli and daman and Diu, by whom or on whose
behalf money is deposited in an account and the deposit means money
is deposited. Out of the income of the Hindu Undivided Family or an association of
persons or body of individuals, as the case may be , any amount not less
than Rs. 500 and not more than Rs. 70,000 in a year.
Non Resident Indians are not eligible to open an account under the
Public Provident Fund Scheme:-
Provided that if a resident who subsequently becomes Non Resident Indian
during the currency of the maturity period prescribed under Public Provident
Fund Scheme, may continue to subscribe to the Fund till its maturity on a Non
[MOF (DEA) Notification No GSR 585 (E) dated 25.7.2003]
4. Manner of making the subscription:- (1) Every individual desirous of
subscribing to Fund under the Scheme for the first time either on his own behalf
or on behalf of a minor of whom he is the guardian or on behalf of a Hindu
Undivided Family of which he is a member or on behalf of an Association of
persons or a Body of individuals as referred to in sub rule 2(b) of Rule 3 above
shall apply to the Accounts Office in Form A, or as near thereto as possible
together with the amount of initial subscription which shall be integral multiples
(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 pass
book 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.
(3) The subscriber shall deposit his subscription with the Account Office
with challan in Form B, or as near thereto s possible. The counterfoil of the
challan shall be returned to the depositor by the Account Office, duly evidence
by receipt. In the case of deposits made by cheques 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 by crossed cheques or draft
or pay order din favour of the Accounts Officer at the place at which that office
5. Number of subscription: The subscription, which shall be in multiples of
Rs. 5 may, for any year, be paid into the account in one lump sum or
installments not exceeding twelve in a year.
6. Transfer of Account:- A subscriber may apply for transfer of his
account from one “Account Office” to another “Account Office”.
7. Issue of duplicate pass book, etc.:- (1) In the event of loss or
destruction of a pass book issued by an Accounts Office, the Accounts 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) Condonation of default:- 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 alongwith arrear subscription of Rs. 500 for each year.
8. Interest - Interest at the rate , notified by the Central Government in
official gazette from time to time, shall be allowed for 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
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.
9. Withdrawals from the Fund:- (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 withdrawing from the
balance to his credit, an amount not exceeding fifty per cent of the amount
that stood to his credit at the end of the forth year immediately preceding the
year of withdrawal or at the end of preceding year, whichever is lower, less the
amount of loan, if any, drawn by him under paragraph 10 and which remains to
Provided that not more than one withdrawal shall be permissible during any
(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) Closure of account or continuation of account without deposits
after maturity:- 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 withdrawals 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 installments not exceeding
one in a year.
(3A) Continuation of account with deposits after maturity :- 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 then expiry of one year thereafter, may 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
year blcok period , shall not exceed 60 percent of the balance at his credit at the
commencement of the said period.
10. Loans:- (1) Notwithstanding 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 expiry of five years from the end
of the year in which the initial subscription was made, a subscriber may, he
so desires, apply in Form D or as near thereto as possible, together with
his pass book to the Accounts Office for obtaining loan consisting of a sum
of whole rupees not exceeding twenty five percent of amount that stood
to his credit to at the ends 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.”
11. Repayment of loan and interest :- (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 then loan is sanctioned. The repayment a may be made
either in one lump sum or in two or more monthly installments 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 installments at the rate
of one percent perannum of the principal for the period of
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
installment of the loan Provided that where the loan 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
one 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 on 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 .
12. Nomination and repayment after death of subscriber :-
(1) subscriber to the fund may nominate in Form E or, as
near thereto as possible, one or more persons to receive the
amount stading to his credit in the event of his death before
the amount has become payable or, having become payable ,
has not been paid.
Note:- Nomination may also be made in respect of an account opened
on behalf of a Hindu Undivided Family (HUF).
(2) No Nomination shall be made in respect of an account opened on
behalf of minor.
[MOF (DEA) Notification No. GSR 477 (E) dated 25.5.1994]
(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
(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-
a. If a subscriber to an account in espect 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 adjustment, 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 the death of the deceased nominee.
b. 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 to
the legal heirs of the deceased on receipt of 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 paper, in the forms as in Annexure to Form G.
(7) A subscriber to the Fund cannot nominee a trust as his nominee.
13. Power to relax:- Where the Central Govt is satisfied that the
operation of the 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.
Report dated Economic time on 15-11-11. PPF interest rates have been revised from 8% to 8.6 for this fiscal. If this remais steady anybody who starts investing Rs.1 Lakh in the PPF from this year will have almost Rs. 1. 57 lakh more in his corpus by the end of 15 years. Raising of Annual limit from Rs.70,000/- to Rs. 1 Lakh also benifit investors.
Experts say that the hike in rate has made the PPF the best option for conservative investors. If a couple starts contributing Rs. 1 Lakh each every year, they can build a corpus of Rs. 61.8 Lakh over 15 Years. However this asumes that the interest rate will remain steady at 8.6%, a very unlikely scenario considering that the rate is linked to the yield of government bonds.. Analysts believe that the interest rate cycle is close to peaking out and rates could go down soon.
Tags: PPF Account in India, PPF Accout sheme 1968, PPF Account maximum limit, PPF Account interest rate, PPF Account Tax benifit, PPF Account Nominee, Public provident fund scheme, Public provident fund loan, PPF Account withdrawal, PPF Account court attachment, PPF Account tax free investment, PPF Account tax free yield, PPF Account instalment, PPF Account repayment. PPF account minimum investment, PPF Account maximum investment. PPF account in Post office, PPF account in State bank,