The Ministry of Finance said that the subscribers of the Public Provident Fund (PPF) can prematurely close the deposit scheme after the completion of five years for reasons such as higher education or expenditure towards medical treatment. This move will bring big relief to lakhs of Public Provident Fund (PPF) subscribers.
According to the notice served by the Ministry of Finance a subscriber should be allowed for the premature closure of his account or an account of a minor of whom he is the guardian on ground that amount in the Public Provident Fund (PPF) is required for treatment of genuine ailments and life- threatening diseases of the account holder, spouse or dependent children, on production of legal documents from competent medical authority.
The notice further said that the allowance in terms of education would be applicatory to the demand of higher education of the account holder or the minor account holder on production of legit documents and fee bills in confirmation of admission in a government recognized institution in India or abroad.
The Ministry of Finance however added that such premature closure will be allowed only if the account has completed five financial years.
The tax- free savings fund was introduced by the ministry of finance in 1968 and income tax deduction under section 80C can be availed under deposits made under PPF scheme.
A PPF account can be opened for 15 years. After 15 years, the account can be extended for five years.