Thu. Mar 28th, 2024

Small savings schemes like Public Provident Fund (PPF) and National Saving Certificates (NSC) will not earn you the same rate if you become non-resident Indians (NRI).

Under the new rules issued by the government , these investments will be deemed to be closed on the day the investor becomes a non-resident.

Small savings schemes such as PPF and National Savings Certificate have been proposed with several amendments raising apprehensions regarding the subscribers losing out on several benefits.

The Finance Ministry in a statement stated that PPF accounts will now be allowed to close prematurely in case of urgent situations such as medical emergencies or higher education needs.
Income tax benefits , no change in interest rate or tax policy on small savings scheme is being made through the amendment.

Subsequently , the investor will be paid interest at the much lower post office savings account rate at 4% p.a , the government said in a notification. This is nearly half of what these investments earn at present. The amended rules were notified in the official gazette earlier this month.

Click here for more information on UAN and PPF account.

To make provisions for premature closure easier in respect of all schemes, provisions could now be made through specific scheme notification  the statement said. The amendments proposed would also allow the government to put in place a mechanism for redressal of grievances and for amicable and expeditious settlement of disputes relating to Small Savings.