Do This Before March 31 to Keep Accounts Active


Income Tax Saving Schemes: March, for investors, is the tax saving month of the year. However, saving tax means also depositing your money in such schemes. This also means that you have to maintain a minimum deposit amount to continue to get benefits of these schemes. Policies like the Public Provident Fund or PPF, National Pension System or NPS scheme and Sukanya Samriddhi Yojana or SSY have the rule for its investors to make a minimum amount of investment each year to enjoy seamless benefits. These schemes are popular among the salaried and middle class investors in India, who want risk-free savings backed by the government.

If one fails to deposit the minimum yearly amount, his or her PPF, NPS and SSY accounts will be deactivated, which will result in failure to save taxes going forward. While one can again open these small savings scheme accounts that allows income tax benefits, it will incur penalties once deactivated. Therefore, it is always beneficial to check whether the account holder has deposited the minimum annual amount to their PPF, NPS and SSY accounts.

Here is a list of the minimum annual deposit required to maintain an active PPF, NPS and SSY account

Public Provident Fund: The Public Provident Fund or PPF account is one of the most popular tax saving schemes in India, introduced by the Post Office and backed by the Centre. A number of post office saving schemes are rolled out by the Department of Post to ensure the personal financial benefit of the general public as well as the senior citizens, and PPF is one among them. However, account holders need to make a minimum deposit of Rs 500 every financial year to ensure the PPF account does not get deactivated. Loan or withdrawal facility will not be available on discontinued accounts. One can reopen the PPF account by paying a fine of Rs 50 for each year of default.

National Pension System: For Tier 1 account of the National Pension System or NPS scheme, a minimum deposit of Rs 1,000 is required to maintain the activeness of the account. There is no upper limit on deposits made in an NPS account. It should also be noted that for Tier 2 account, the minimum deposit rule is not applicable. Account holders can reactivate Tier 1 NPS accounts by paying a penalty of Rs 100 along with Rs 1,000 as arrear for each defaulted year. This can be done both online and offline.

Sukanya Samriddhi Yojana: A minimum deposit of Rs 250 in a financial year is required to maintain a Sukanya Samriddhi Yojana or SSY account. An SSY account where the minimum deposit is not made on time is considered a defaulted account. An investor has to pay a fine of Rs 50 for each defaulted year, along with a minimum contribution of Rs 250 to regularise a defaulted SSY account.

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Divyansh Singh

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