Jagoinvestor

August 23, 2014

Yes – You can now invest extra Rs 50,000 in your PPF account and it will be accepted

Congratulations, Now you can now go and deposit the extra Rs 50,000 in your PPF account as the limit for your PPF investments was raised from Rs 1 lac per year to Rs 1.5 lacs in this budget.

ppf

A lot of investors had invested Rs 1 lac in their PPF account this year start and when the budget raised the limit by extra Rs 50,000 . They had this big question – “Can I invest Rs 50,000 more in my PPF account this year and get the income tax benefit?”

The thing is even if the budget has mentioned that PPF limit was raised, it does not get increased instantly. I mean the banks officials and post office staff does not allow the max limit the same moment. A separate notification is required by the RBI after making the required amendments in the Public Provident Fund scheme and that’s exactly what happened on 22nd Aug .

PUBLIC PROVIDENT FUND (AMENDMENT) SCHEME, 2014 – AMENDMENT IN PARAGRAPH 3 AND FORM-A

NOTIFICATION NO. GSR 588(E) [F.NO.1/2/2014-NS.II], DATED 13-8-2014

In exercise of the powers conferred by sub-section (4) of Section 3 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government hereby makes the following further amendments to the Public Provident Fund Scheme, 1968, namely :—

1. (1) This Scheme may be called the Public Provident Fund (Amendment) Scheme, 2014.
(2) It shall come into force from the date of its publication in the Official Gazette.

2. In the Public Provident Fund Scheme, 1968,—

(i) in paragraph 3, in sub-paragraph (1), for the letters and figures “Rs.1,00,000”, the letters and figures “Rs.1,50,000” shall be substituted;

(ii) In Form-A, in paragraph (iv), for the letters and figures “Rs.1,00,000”, the letters and figures “Rs.1,50,000” shall be substituted.

Below you can see the copy of the notification which came 1 day back and the same has been sent to all the banks and post office departments and RBI has asked them to now incorporate it and also inform to all the PPF subscribers.

ppf limit raised notification rbi

How much extra income tax you will save by investing Rs 50,000 more in PPF ?

If you are into the highest bracket of 30% , in that case you will save 30% tax on the extra Rs.50,000 invested in PPF. So that comes to Rs.15,000.

Earlier you used to pay income tax on Rs.50,000 (because you had maxed out your investments in income tax saving products) , but now you will save 50,000 and also pay Rs.15,000 less in your income tax (because your taxable income will come down by 50,000)

So now you can visit your SBI Bank or Post office or any other bank where you have your PPF account and invest the extra Rs.50,000 🙂

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Malaya Sahu
Malaya Sahu
7 years ago

Can one deposit Rs.150000 cash in PPF account at one go?

Venky
Venky
9 years ago

Hi Frdz,

Can you please guide which is the best time to open PPF account . I dnt have much idea So please frdz share your experience and also plz let me know which are the documents required to open PPF account (I already having savings accounts with SBI and bank of baroda).Thanks in advance.I hope i would get reply from our frdz soon…

Renga
Renga
9 years ago

Hi,
I have a query on PPF, my self has PPF account in Post Office, and planning to open PPF acc for my wife in SBI as she has account with SBI. Now the question is can I deposit 1.5 lakh in my PPF account and another 1.5lakh in my wife’s PPF account?

tkl
tkl
Reply to  Jagoinvestor
7 years ago

Please explain.. Will be helpful to all.

Rahul
Rahul
9 years ago

Hello Manish,

Thanks for this info,

However i am unclear on your mention about tax benefit of saving extra 50K in PPF
You mentioned that, “If you are into the highest bracket of 30% , in that case you will save 30% tax on the extra Rs 50,000 invested in PPF . ”
1) But as per my understanding PPF savings comes under section 80C.
And Section 80C allows to invest in various others forms of investments such as Insurance/LIC/ULIP and on top of it your own Company PF.
2) And once you cross the highest bracket of 30%, its obvious that, more than 50% of your section 80C comprises of Company PF.
Assuming your individual Company PF contribution is 6K per month. So total 72K of section 80C gets occupied by this. And you left to do your own savings of just 78K.
Hence even if a person invests 1.5L in PPF, he actually does not get tax benefit for whole 1.5L of investement in case of highest bracket of 30%.
Having said that PPF saving of 1.5L should be the first priority of each individual of highest bracket of 30%.

Amit Jandial
Amit Jandial
9 years ago

Bad….Post office in my district is still not accepting the other 50,000 rs. They say they have not received any notification yet. Time to transfer to SBI becuase of their laid back attitude

Shashank Shankar
Shashank Shankar
Reply to  Jagoinvestor
9 years ago

PPF in my district Post Ofiice (Motihari-Bihar) isn’t accepting more than 1 Lakh. They are saying, need to change in software. What should I do in this condition ?

PFInsights
PFInsights
9 years ago

Indian Post website mention the new limit i.e. Rs1.5lakh on it website http://www.indiapost.gov.in/ppf.aspx
Are they still rejecting the receipts above Rs1 lakh?

Jagoinsvestor is doing an excellent job of timely investor education. Keep up the good work. I have also started a blog on personal finance insights. Please visit at http://www.pfinsights.wordpress.com

Renga
Renga
9 years ago

Hi,

I have a PPF account with post office, do you know if I can pay the premium through netbanking this will avoid me having to go the postoffice every time I want to deposit..?

Shikher
Shikher
Reply to  Renga
9 years ago

As far as i know, PPF deposits in post office cannot be done online through netbanking. You would need to physically visit the post office and then deposit the amount you need to in your PPF account.

umesh raghvani
umesh raghvani
9 years ago

i will open ppf acount myself,wife, & dauther

raj
raj
9 years ago

My only query is will the people like me who had invested money prior to this notification given Interest for the month of August 2014 or Not.

Reid
Reid
9 years ago

Thanks, Manish & Nandish! I look forward to taking advantage of this as soon as possible.

Jayesh Darji
Jayesh Darji
9 years ago

Dear Manish bhai,
one another fan of yours till read and share all of ur articles ,yes really challenging for anyone to off tradition of insurance policies but you are change our style of watching it as many many thanks and yes i am start my PPF ac this year only (I didn’t know even of it!!!!!) please inform us any new investing plans pl MF
Jayesh darji

Suresh
Suresh
9 years ago

I went to deposit additional Rs. 50,000/- in my PPF account, with Mahim Head Post Office, Mumbai, today i.e. on 30th August 2014, however the counter person refused to accept. It seems “Modi Governance” also take looooooong time to percolate.

raj
raj
9 years ago

Dear Friend,
We have seventeen PPF accounts in my extended family inc. Parent and child combo.
Well we had successfully transferred additional Rs. 50,000/- on 3 August 2014! in nine accounts.
No problem faced.

However, few wise men in my family prefer to do these transaction offline however, they were not entertained at branch for this!

My only query is will the people like me who had invested money prior to this notification given Interest for the month of August 2014 or Not.

Regards,

Gaurav
Gaurav
9 years ago

Does it matters where city I am currently residing before I open my PPF Ac. I am living away from my hometown and can migrate back in a couple of years. So can I face any problem if I want to withdraw and close PPF Ac?

Sanjay
Sanjay
9 years ago

Hi,

I tried to deposit additional 50K in my PPF A/C linked to my ICICI Bank A/C. But the transaction was rejected. After enquiry with bank, they informed me that ICICI bank has not received permission to accept the additional amount !

Anyone has similar experience ?

Neeraj
Neeraj
Reply to  Sanjay
9 years ago

I tried depositing additional 50k yesterday (30 Aug) in PPF linked to ICICI Bank A/C and transaction was successful.

Shikher
Shikher
9 years ago

Can someone please let me know as to when can we do the online transfer for extra 50 K if the PPF account is maintained in SBI? Has anyone tried doing so already?

Hemant
Hemant
Reply to  Shikher
9 years ago

it is working now through Net banking in SBI.

Bss
Bss
9 years ago

I transferred extra 50K online to my SBI PPF on 3rd of august but the amount was not accepted and returned back. I will try again after few days.

Saravanan. A
Saravanan. A
Reply to  Bss
9 years ago

It might be working now, there is a banner in onlinesbi that is allowed as GO dated 13th Aug 2014. You can try it.

Niraj Kumar
Niraj Kumar
Reply to  Bss
9 years ago

I transferred 50K on 26th and its not rejected and it shows total balance in PPF account.
But i am not sure we would get the interest of this 50K till 15/10/2014 because its effective from 15/10/2014
flash message on SBI:

Ref. GOI Notification dated 13.08.2014, annual ceiling for credit to PPF accounts enhanced to Rs.1.50 lacs in CBS as well as Net Banking”. With effect from 15/10/2014, a service charge of Rs.25/- will be recovered per instance of failed standing Instruction/bill payment scheduled or with auto pay instruction, wherever the reason of failure is sufficient/clear funds not available or account has hold.

Ramesh
Ramesh
Reply to  Niraj Kumar
9 years ago

Niraj,
You are mixing two different message. The 15/10 date is for introduction of the service charge. The upper limit has been increased to 1.5lac in SBI from 21/08.

Here is the link:
https://retail.onlinesbi.com/sbijava/whts_new_sbi.html

saarebank
saarebank
9 years ago

Very useful information here

yeshwant
yeshwant
9 years ago

Very useful info on time.

Pradeep H
Pradeep H
9 years ago

Hi mannish,
Somewhere it was stated that only 12 deposits allowed per year towards ppf contribution. Is there any change in that. As many banks provides zero balance sb account if we setup monthly contribution. But that time if we want to contribute extra, that will become 12+ occurrence. Pls clarify. (I hv ppf in icici)

Thanks,
Pradeep