Government Eliminates Fees for Updating Nominee Information in PPF Accounts
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Synopsis
The Indian government has removed fees for updating nominee details in PPF accounts, as announced by Finance Minister Nirmala Sitharaman. The Gazette Notification aims to ease the process for account holders and encourage savings among residents.
Key Takeaways
- Government prohibits fees for PPF nominee updates.
- Banking Amendment Bill allows for multiple nominees.
- PPF accounts offer tax-free returns and guaranteed interest.
- Long-term savings option with a 15-year lock-in.
- Flexibility with partial withdrawals and loans possible.
New Delhi, April 3 (NationPress) Finance Minister Nirmala Sitharaman stated on Thursday that the government has released a Gazette Notification prohibiting financial institutions from imposing any fees for changing or updating nominee information in Public Provident Fund (PPF) accounts.
“It was recently reported that financial institutions were charging a fee for updating or modifying nominee information in PPF accounts. The necessary amendments have now been made to the Government Savings Promotion General Rules 2018 via the Gazette Notification dated April 2, 2025, eliminating any fees associated with the nominee update process for PPF accounts,” the Finance Minister shared on X, along with a copy of the Gazette Notification.
The Banking Amendment Bill 2025, which has recently been approved, permits the nomination of up to four individuals for the disbursement of depositors' funds, items stored in safekeeping, and safety lockers, as per the Finance Minister.
A PPF account represents a long-term, government-supported savings initiative that delivers tax-free returns, providing a secure method for wealth accumulation aimed at those seeking safe investment options. PPF guarantees a fixed interest rate, rendering it a secure investment choice compared to shares, which are exposed to market risks due to fluctuating prices.
PPF accounts are structured for long-term savings, featuring a lock-in period of 15 years. Contributions to a PPF account qualify for tax deductions under Section 80C of the Income Tax Act to promote individual savings.
One of the advantages of PPF savings is that both the interest accrued and the final maturity amount are exempt from taxation.
Moreover, PPF accounts offer some flexibility, allowing a portion of the balance to be withdrawn after a period of five years, if desired. Additionally, loans can be secured against a PPF investment.
Any resident Indian, including minors, is eligible to open a PPF account. The minimum deposit requirement is set at Rs 500, while the maximum limit is Rs 1.5 lakh per financial year.
Furthermore, the PPF account can be extended for an additional five years once the initial 15-year maturity period has lapsed.
