Opened many PPF Accounts to save tax? Here’s what the new rule says

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According to the PPF guidelines for 2019, an individual cannot hold numerous PPF accounts in his or her name.

New Delhi: Do you have more than one Public Provident Fund (PPF) account in your name? If you opened two or more PPF accounts on or after December 12, 2019, you will be unable to merge them currently. Previously, the Department of Posts enabled investors to combine multiple PPF accounts into a single PPF account. However, the authorities set a deadline for the merger of PPF accounts on December 12, 2019.

PPF New Rule

According to the PPF guidelines for 2019, an individual cannot hold numerous PPF accounts in his or her name. Earlier this month, the ministry of finance’s department of economic affairs (budget division) advised banks and post offices not to send any proposal for consideration of merger of PPF Accounts formed under the PPF Rules 2019, i.e. on or after December 19, 2019. The order was issued in response to a PPF account consolidation request made by Dr. Anupam Mishra at the Indian Bank, KGM College, Lucknow Branch.

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On March 3, 2022, the Ministry of Finance’s Department of Economic Affairs (Budget Division) issued a letter to all head post offices stating, “In case any one of the PPF accounts or all PPF accounts is/are proposed to be merged or amalgamated is/are opened on or after 12.12.2019, such account(s) shall be closed without any interest payment and no proposal should be sent to the Postal Directorate for amalgamation of such PPF Accounts.”

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Here’s what it means for PPF Account holders

1) The deadline for merging PPF accounts is December 12, 2019, and any PPF account formed after that date is ineligible for regularisation.

2) If you open numerous PPF accounts in your name on or before December 12, 2019, they cannot be combined. To save tax, many people register multiple PPF accounts – one with the bank and one with the post office. Those accounts can no longer be combined into a single account.