Ppf

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 June 2013 Can anyone provide guidance on the provisions of PPF where in the event of death of the suscriber, the amount needs to be withdrawn from the account? Thanks in advance

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

14 June 2013 Yes. it can be withdrwan by the nominee given by the PF holder

Querist : Anonymous

Querist : Anonymous (Querist)

14 June 2013 Actually my query is in the event of death can the account be continued with/without any contribution. There are no guidelines available on the net which allows the nominee to continue or discontinue the account considering the tax free interest and relative safety of the money. Any circular from RBI to that effect.

Upgrade to CAclubindia Pro. Subscribe Now!

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
Follow

10 August 2024 In the event of the death of a Public Provident Fund (PPF) subscriber, the treatment of the account and its funds are governed by specific provisions laid out by the Ministry of Finance and the Reserve Bank of India (RBI). Here's how the situation is typically handled:

### **1. Closure of PPF Account Upon Death**

#### **Key Points:**

- **Immediate Closure:** On the death of the PPF subscriber, the PPF account will be closed and the nominee or legal heir will be entitled to receive the balance in the account, including the accrued interest.

- **No Continuation:** The PPF account cannot be continued in the name of the nominee or legal heir. The account must be closed, and the balance withdrawn. The nominee cannot make further contributions or keep the account active.

### **2. Provisions and Guidelines**

#### **Relevant Provisions:**

- **Rules for Withdrawal:** The rules governing PPF accounts are outlined in the Public Provident Fund Scheme, 1968. Specifically, Rule 8 of the PPF Scheme addresses the issue of the subscriber's death.

- **Circulars and Notifications:** As of now, there isn't a specific RBI circular addressing the continuation of a PPF account after the death of the subscriber. The guidelines for such situations are generally provided by the Ministry of Finance and the specific PPF rules.

#### **Process to be Followed:**

1. **Submit Claim:** The nominee or legal heir must submit a claim form to the bank or post office where the PPF account is maintained. This includes:
- Death certificate of the subscriber.
- Proof of identity of the nominee or legal heir.
- Passbook or account statement.

2. **Provide Documents:** Additional documents might be required, such as a copy of the will (if applicable) or a succession certificate in the absence of a will.

3. **Withdraw Funds:** Once the claim is processed, the balance in the PPF account will be paid out to the nominee or legal heir. This includes the principal amount and the interest accrued.

### **3. Tax Implications**

- **Tax-Free Amount:** The amount received from the PPF account is tax-free, both in terms of interest earned and the principal amount, as per the current tax laws.

### **4. No Provision for Continuation**

- **No Circular for Continuation:** There are no provisions or circulars that allow for the continuation of the PPF account after the death of the subscriber. The account must be closed and the balance withdrawn.

### **Summary**

Upon the death of a PPF subscriber, the account is required to be closed, and the balance (including interest) must be withdrawn by the nominee or legal heir. The account cannot be continued or kept active in the name of the nominee. There are no provisions or RBI circulars allowing for the continuation of the PPF account posthumously.

For the latest updates or specific queries, you may want to consult the latest PPF rules or contact the bank or post office where the PPF account is maintained.