You need to do this to keep accounts active


As we approach the end of the financial year, many tax-saving investment options like Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY) and National Pension System (NPS) require minimum contributions to prevent them from turning inactive. So, if you are an account holder of any of such schemes, and have not deposited any money for the current financial year, you must pay on or before March 31.

Investments in PPF, NPS, SSY help taxpayers avail of a deduction of up to 1.5 lakh under Section 80C of the Income-Tax Act. The deduction, however, can be claimed under the old tax regime only. If a new tax regime is chosen, one has to forgo most tax exemptions and deductions.

So, let us understand how to keep these accounts active

Public Provident Fund (PPF)

The minimum yearly contribution for the PPF account in a fiscal year is 500. The last date to make this payment for the current financial year is March 31, 2022. 

If a minimum contribution is not made in the financial year, the PPF account will be treated as dormant.  You will have to get it re-activated again by depositing a 500 minimum annual deposit and a 50 penalty for each year of minimum deposit default.

National Pension System (NPS)

For Tier-I NPS account holders, it is mandatory to make a minimum contribution of 1,000 in a financial year to ensure that the account remains active. The minimum deposit rule is not applicable to the NPS Tier-2 account.

If the minimum contribution is not made to the NPS Tier-I account, then the account will become dormant. As per the NPS scheme rules, one will be able to re-open one’s NPS account after depositing 1,000 minimum deposit and a penalty of 100 for each year of minimum deposit default.

Sukanya Samriddhi Yojana (SSY)

SSY account holders are required to deposit at least 250 to keep their account active. If the minimum deposit is not made in a financial year, then the account will be treated as dormant.

To regularise the account, the account holder will have to make a minimum payment of 250, along with a penalty of 50 for each year.


Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

the App to get 14 days of unlimited access to Mint Premium absolutely free!

Source link

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.