Public Provident Fund
If you have forgotten to deposit the minimum amount annually in your PPF account, then there is no need to panic. PPF is a safe investment option, in which your money remains safe even after small mistakes. However, if you do not invest on time, your account may become inactive. The good thing is that you can activate it again by paying a small penalty. Let us tell you in detail about the entire process and rules related to it.
Public Provident Fund (PPF) is a popular option to save income tax and make long-term safe investments. But many times people forget to make minimum investment in it during the financial year. In such a situation, their PPF account becomes inactive. According to the rules of PPF, it is necessary to deposit at least Rs 500 between every financial year. If an investor does not deposit this minimum amount throughout the year, his account becomes inactive. However, this does not mean that your money will be lost. PPF is a scheme supported by the Government of India, so your investment remains completely safe.
Loss if account is inactive!
Some features stop after the account is deactivated. For example, you cannot take a loan against this account and the facility of partial withdrawal is also stopped. Apart from this, you will also not be able to avail tax exemption under Section 80C for that period. Now the question arises that how to activate it again and how much penalty will be imposed. To reopen the PPF account, a penalty of Rs 50 has to be paid for every year in which you do not make the minimum investment. Along with this, it is also mandatory to deposit Rs 500 for every missed year.
Suppose your account is inactive for two years, then you will have to deposit a total of Rs 1100 including Rs 100 penalty and Rs 1000 minimum deposit. After this your account will be activated again. To activate the account, you will have to go to the bank or post office where you have your PPF account. A written application will have to be given there. The bank or post office official will check the status of your account and reactivate the account after depositing the required amount. Therefore, if you have forgotten to invest in PPF, reactivate it in time, so that you can avail all its benefits again.
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