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Business News/ Money / Personal Finance/  PPF account holder moving abroad can continue investing without this benefit
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PPF account holder moving abroad can continue investing without this benefit

Public Provident Fund: Any Indian citizen can open PPF account but NRIs and HUFs are not allowed to open PPF account

A PPF account holder moving abroad before maturity of the account is allowed to continue investing in one's PPF account. (iStock)Premium
A PPF account holder moving abroad before maturity of the account is allowed to continue investing in one's PPF account. (iStock)

Public Provident Fund or PPF is a retirement-oriented central government-backed small saving scheme, which is 100 per cent risk free. Currently, PPF interest rate offered is 7.1 per cent, which is one of the highest yielding risk-free investment instruments. An earning individual, looking for safe investment option that can save income tax and ensure guaranteed return, PPF is an answer to their query. Any Indian citizen can open PPF account but NRIs and HUFs are not allowed to open PPF account. So, what will happen to those PPF account holders whose citizenship changes from an Indian to NRI before the maturity of PPF account?

Speaking on the PPF account holder moving to abroad before maturity of the account; Amit Gupta, MD at SAG Infotech — a SEBI registered tax and investment solution company said, "A PPF account holder moving abroad before maturity of the account is allowed to continue investing in one's PPF account. The account holder can continue to invest 1.5 lakh per annum in one's PPF account and claim income tax benefit given under Section 80C of the income tax act, if the account holder is filing income tax return (ITR) in India." However, Amit Gupta of SAG Infotech said that the PPF account holder won't be allowed to extend one's PPF account after the maturity period.

Speaking on the extension benefit for PPF account holders, whose citizenship status changes before maturity; Mumbai-based tax and investment expert Balwant Jain said, "A PPF account holder moving to abroad is allowed to continue investing up to 1.5 lakh in single financial year but he or she won't be allowed to extend one's PPF account after the maturity. However, if the PPF account holders again comes back and becomes Indian citizen before the end of PPF account maturity, in that case he or she would be allowed to extend one's PPF account. In fact, if a PPF account holder has extended PPF account and then its citizenship changes from an Indian to an NRI, then in that case too, the PPF account holder can continue investing till the maturity period of the PPF account."

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Asit Manohar
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Published: 14 Aug 2021, 11:21 AM IST
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