PPF Withdrawal For NRI, NRI PPF, PPF Withdrawal Rules

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Public provident fund is a safe saving scheme for NRI people and gives more tax benefits to each of them. Anybody can invest money for 15 years and the maximum amount to be invested is 1.5 Lacs. But one should keep up to date about the changes in new PPF with drawl rules when he shifts in foreign country to become non resident Indian.

In brief Indian govt. said in October 2017, those non resident PPF accounts would be converted to normal saving account who are likely near to move in a foreign country soon. But later subsequently government made a big change to the current scenario where non-residents can continue their PPF account even if they change their citizenship. PPF withdrawal gives flexibility to its account holder in which an account holder can partially debit amount after completion of 7 years if he needs any time. One major advantage of PPF account is that interests and amount deposited both are free from tax when someone withdraws it.

Premature Closing of PPF Account

PPF account may be closed even before the maturity of 15 years in some conditions and to take advantage of taxation people usually go for PPF opening scheme. PPF account provides flexibility to withdrawal amount partially either after 5 years or 7 years as per someone need for the health-related problem or educational purposes. So main thing to be noticed here is you can apply for closing a PPF account after a minimum of 5 financial years.

Important Facts about PPF Account

You are planning to invest in PPF scheme then need to know essential facts about it.

• A minimum amount of 500 Rs. and 1, 50, 000 Rs. is necessary to be deposited in a financial year.
• You can invest up to a maximum of 15 years.
• An account can be extended in a block chain of a minimum 5 years period.
• Deposits can be done in a maximum of 12 times during a financial year.
• A fair interest rate is grabbed at 8% in most of the banks which are exempted from Income Tax under section 80 C.
•  1% of interest rate is minimized on the total accumulated amount when you partially withdrawal after 5 years of partial maturity.
• Anyone can deposit amount in form of cash, cheque, online funds transfer which may differ from one bank to another.

PPF Partial Withdrawl Rules after 15 years extension

Under PPF scheme, partial withdrawal of ppf amount is allowed and in case you want to opt some money at any time after 5 years of partial maturity, check out below-mentioned points-

• You can withdrawal up to 50% of the money deposited once the 5^th financial year completed before making such a request.
• Only one partial withdrawal is allowed within a financial year.
• The requestor must submit a passbook along with application request form.
• The withdrawal amount is tax-free.

What are PPF Withdrawl rules followed by an account holder?

To know everything about PPF account opening, tax benefits to withdrawal rules- follow our complete article. When you need to withdrawal some amount someone needs to fill Form C with the concerned branch of the bank where you manage your PPF account. There are 3 sections of this form:

Declaration Section: In this section, you just need to provide your PPF account number, amount of money you want to withdraw. Along with that, you must tell how many years already passed over since the account is maintained.

Office Usage Section: It consists of the following:

• Date of PPF account opening
• Total balance available in PPF account
• Total withdrawal amount needed
• Date and signature of service manager
• Previous date of withdrawal request

Bank Detail Section: Under this section, a bank name, branch, etc. are to be taken where PPF amount is being credited. A PPF passbook also required to be attached with PPF withdrawal form.

Which account does an NRI need to invest in the PPF account?

An NRI cannot invest in the PPF account. Nevertheless, if somebody's residential status subsequently transforms to NRI, the account is permitted to be run till it reaches maturity. PPF account is a 15-year scheme that can be extended for an indefinite period in blocks of five years.

I had made an investment in PPF about 15 years before when I was a resident Indian. The account is going to mature in 2018, but I am an NRI at the moment. If I put in the matured amount in fixed deposits, will it be liable to tax?

Under the Public Provident Fund Scheme, NRIs are not entitled to open a PPF account. Nevertheless, they are permitted to invest in PPF in India on a non-repatriation base till maturity of the Public Provident Fund account that was opened when he/she was the inhabitant of India.

On 3 October 2017, a notice was published by the ministry of finance modifying the provisions of the PPF Scheme indicating that an Indian resident who opened an account under the PPF scheme shortly turns into a non-resident throughout the currency of the maturity period, the PPF account is supposed to be deemed to be closed from the date of amendment of residential status from resident to non-resident.

On the other hand, the recent amendment notice has been kept in abeyance till additional orders by an Office Order from the ministry of finance in February 2018. Therefore, an NRI can carry on contributing towards PPF in India on a non-repatriation base till maturity if the Public Provident Fund account was opened when the person was resident of India.

Under the income tax law, any amount acquired from the Public Provident Fund account is excused from tax in India, regardless of the residential status. As soon as you put in the matured amount in fixed deposits in India sustained in an NRO account, the interest income from these fixed deposits will be liable to tax in India, contingent on any respite under India’s Double Tax Avoidance Agreement with the country in which you might be a tax resident that can be availed by providing a tax residency official document along with other specified details.

Can PPF withdrawals be repatriated?

The balance in the NRO account can be repatriated in a foreign country up to a limit of USD 1 million per financial year.

What is Tax Implication on Public Provident Fund Withdrawal?

The following table will assist you to understand the taxability on withdrawal of PPF with no trouble: 

I am an NRI living in the USA many years ago? Would there be an income tax liability on PF withdrawal after more than five years of service? If yes, which form do I need to submit?

Of course, the PPF withdrawal will be liable to tax as income, and you are supposed to incorporate it into your ITR under the subtitle 'Income from Salary.'

You ought to fill in the PF Withdrawal Forms recognized as Form 19 that can be downloaded without problems by logging on to the authorized PPF website at www.epfindia.org.in.

Can NRI close PPF account before maturity?

An NRI cannot invest in the PPF account. Nevertheless, if somebody's residential status subsequently transforms to NRI, the account is permitted to be run till it reaches maturity. PPF account is a 15-year scheme that can be extended for an indefinite period in blocks of five years. On the other hand, for a resident turned NRI, the extension is not permissible.

Is PPF withdrawal taxable after five years?

Of course, the PPF withdrawal will be liable to tax as income, and you are supposed to incorporate it into your ITR under the headline 'Income from Salary.'

I am an NRI living in the USA. What would be offering interest rate if I close my PPF account?

The Ministry of Finance, Government of India declares the rate of interest for Public Provident Fund account each quarter. The present interest rate effectual from 1 October 2018 is 8.0% Per Annum' (compounded once a year).

I am an NRI living in Abroad. Should I reopen or continue my PPF account in India?

Non-Resident Indians (NRIs) are not allowed to open a Public Provident Fund account. If an individual turns out to be an NRI after opening the Public Provident Fund account, he or she can carry on to maintain his account but is not allowed to extend its period further as soon as the term is completed.

What does the most recent news about NRI Public Provident Fund Account meant for NRIs?

The Non-Resident Indians cannot invest in Public Provident Fund. However, if somebody's residential status later changes to Non-Resident Indian; the account is permitted to be run till maturity. Public Provident Fund is a 15-year scheme that can be extended until further notice in blocks of five years. On the other hand, for a resident turned Non-Resident Indian, the extension is not permitted.

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