Changes in Rules For PPF, SCSS, and Post Office Savings Accounts: Government Announces Relaxations

The government has recently made adjustments to regulations governing several small savings schemes, notably the Public Provident Fund (PPF) and Senior Citizen’s Savings Scheme (SCSS).

These small savings schemes represent investment opportunities regulated by the Department of Economic Affairs (DEA) under the finance ministry.

Currently, the government offers a total of nine small saving schemes, encompassing Recurring Deposit (RD), PPF, Sukanya Samriddhi Yojana (SSY), Mahila Samman Saving Certificate, Kisan Vikas Patra, National Savings Certificate (NSC), and Senior Citizen Savings Scheme.

What Has Changed?

Senior Citizen’s Savings Scheme (SCSS): For the Senior Citizen’s Savings Scheme, the new norms provide three months to open an account against one month at present.

According to the gazette notification issued on November 9, individuals now have a three-month window from the date of receiving retirement benefits, along with proof of disbursement, to open an account under the Senior Citizen’s Savings Scheme.

The notification specifies that interest on the deposit in an account opened under the senior citizen’s savings scheme will be calculated based on the applicable scheme rate, either on the maturity date or the extended maturity date.

Public Provident Fund (PPF)

The recent notification introduces changes concerning the premature closure of Public Provident Fund (PPF) accounts, identified as the Public Provident Fund (Amendment) Scheme, 2023. The amendments specifically address premature withdrawals under the National Savings Time Deposit scheme.

Post Office Savings Account

As per the notification, if a withdrawal is made prematurely from a five-year account after four years from the account's opening date, the interest payable will be at the rate applicable to the Post Office Savings Account.

Under the existing norms, closing a five-year time deposit account four years from the deposit date entails the application of the interest rate applicable to a three-year time deposit account.

Also Read: Agricultural Income in India: Tax Treatment, Types & Key Rules

Leave a reply