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Bad News For NRIs: PPF Accounts To Be Deemed Closed If Holder Becomes NRI

DIVYIA ASTHANA | 0
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| October 30 , 2017 , 12:25 IST

Announcing an amendment to the rules of post office savings schemes like the National Savings Certificates (NSC) and Public Provident Fund (PPF) the government has stated that such accounts would be closed before their full maturity if the holders change become non-resident Indians (NRIs).

According to the amended rules of the PPF Scheme 1968 notified by the government in the official gazette earlier this month, "If a resident who opened an account under this scheme, subsequently becomes a non-resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes non-resident".

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The interest payable in the accounts would be calculated up to the date of the account closure, the statement said. The interest rates in Public Provident Funds has been retained by the government at 7.8 percent in line with the rates for other small savings schemes.

Last month, the government had retained the interest rate on Public Provident Fund for October-December unchanged at 7.8%, in line with the rates for small savings schemes.

In the case of NSCs, if the certificate holder becomes an NRI before the maturity period, "the certificate will be encashed, or deemed to be encashed on the day he becomes non-resident" and accordingly the interest would be paid.