Thursday, 3 December 2015

Do you know about Public Provident Fund & Non Resident External (Rupee Account)

Know about Public Provident Fund

  • It is operated by SBI/ selected banks and post offices.
  • Account can be opened by individuals (no joint account –HUF, Trust etc . not allowed since 13.3.05).
  • Account can be opened in Minor’s name by either father or mother (one of them only).
  • Min Rs.500 & max Rs. 100000 p.a. w.e.f.1.12.2011 (max 12 installments in a year). Account can br opened with initial deposit of Rs. 100.
  • 15 years. it can be extended by 5 years at the requested of the subscriber.
  • Interest for any account and fresh deposit up to Rs. 1 lac, qualify for income tax rebates.
  • Interest is 8.7% (1.4.13) allowed on the minimum balance between 5th and last day of the month.
Withdrawal after 6th year subject to max 50% of the balance at the end 2nd preceding financial year.
Lone: allowed after 3rd year of opening of account till end of 6th year.

Nomination: One or more person allowed.

Non Resident External (Rupee Account)

1.Account holder: NRIs of Indian nationality or origin (RBI approval for Bangladesh/Pakistan citizens).

2.Joint account: Can be in the names of two or more NRIs. With close resident relatives, Joint account (Former or Survivor) can be opened. Relatives can operate a/c as power of attorney holder for local withdrawals or remittance abroad in name of account holder.

3.Currencies: Indian rupee by converting foreign currency.

4.Type of account: current, saving or FDR. FDR period at discretion of banks.

5.Repatriation: principal and interest permitted.

6.Source of funds: foreign inward remittance (FIR) or transfer from FCNR-B account (at TT buying rate) of repatriable funds from NRO account

7.Interest rate and interest payment: Bank discretion but not more than domestic deposit (deregulated w.e.f. Dec 16, 2011).

8.Rupee lone: Same as in case of FCNR-B account.

9.Nomination facility is available.

10.Income Tax: Interest is not taxable. TDS not available.

11.Additional ROT not allowed to staff w.e.f. (Jul 18, 2012).

12.Important Notes (a) PoA holders cannot credit foreign currency notes and foreign travelers cheques in NRE accounts. (b) Banks may credit the proceeds of account payee cheques/ demand drafts / bankers cheques, issued against encashment of foreign currency to the NRE account of the NRI account holder where the instruments issued to the NER account holder are supported by encashment certificate issued by AD Category-I/Category-II.

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