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About PPF Account for NRI
Non-Resident Indians (NRIs) are not eligible to open an account under The Public Provident Fund Scheme, 1968. However, NRIs, who had invested in the PPF before becoming a non-resident during the maturity period of the account, can continue to subscribe to the Fund till its maturity on a non-repatriation basis. Non-Repatriation basis means funds in such accounts cannot be transferred back to the NRI’s country of residence or converted to any foreign currency.
PPF subscribers, who become NRI before the maturity of the account, can continue to subscribe to the Fund till the completion of maturity period. PPF account matures after the completion of 15 full financial years from the end of the year in which the account was opened.
Within one month of change of citizenship or resident status, the PPF subscriber should intimate the bank or post office (whichever is applicable).
The government has permitted the investment into the PPF account till the maturity. After the account matures, an NRI is not permitted to deposit fresh contributions. “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-Repatriation Basis.”
An NRI has to follow the same procedure for the PPF withdrawal. There is no relaxation or limitation to them. The form and process are the same. You can get the PPF corpus in your NRO account. In India, there would not be any tax on this amount. However, your country of residence can charge tax on this.
To withdraw PPF corpus after maturity, you have to visit the base branch of your PPF account. Submit PPF withdrawal form along with your passbook. You must give the account number of your NRO account so that money gets credited into it. You can see the image of the PPF withdrawal Form.
The PPF account is not the same for NRI. The rules are different for them. There are some limitations.
For an NRI to close a PPF account, he or she must visit the bank branch in India. At the branch, they need to submit the PPF withdrawal form, ID proof copy, passbook and cancelled cheque. Hence, if they are visiting India, they can go directly to the bank and complete the formalities. The money would go to the individual’s NRO Account.
However, if they can’t come back to India, their representative can visit the branch. For that, they have to give the authorization letter to the representative. Steps are as follows.
The Public Provident Fund is a savings-cum-tax-saving instrument to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits. The scheme is fully guaranteed by the Government of India. Balance in PPF account is not subject to attachment under any order or decree of the court. However, Income Tax & other Government authorities can attach the account for recovering tax dues.
Non-resident Indians are not permitted to open or operate a PPF account in India. It is, however, if a person opens a PPF account as an Indian citizen and later becomes an NRI then the account will remain active.
1. Can a non-resident Indian open a PPF account?
No, any person who is a non-resident Indian does not qualify to open this account. NRI status disqualifies an individual from opening, operating and managing a PPF account.
2. What happens in case a person with NRI status opens a PPF account?
Opening a PPF account despite being an NRI could be possible but it should be understood that strict legal action can be taken against such an individual. If an NRI has a PPF account opened in his or her name, the best course of action to avoid any trouble is to get in touch with the concerned authorities and have the account closed.
3. Will I continue to earn returns if my account is inactive?
No. Interest will not be calculated for the year(s) the account is inactive. Once the account is revived, interest will be calculated on the balance held at the time of revival.
4. Can I contribute to my existing PPF account once I become NRI?
Yes, you can invest in your existing PPF account even after becoming NRI through your NRE or NRO account. You can only contribute till your PPF account matures.
5. Can I withdraw PPF after 5 years?
The Government has amended the PPF scheme and propagated some positive changes regarding the withdrawal of balance from the account. You can now withdraw the whole amount and close your PPF after 5-years.
PPF is a safe investment which gives a good return along with tax-saving. But Non-Resident Indians can’t open this account. If one has opened a PPF account before getting the NRI status, he or she can continue this account with some limitations. An NRI can continue his/her PPF account till maturity. The PPF account matures in 15 years.
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