The deadline for making a minimum deposit in PPF, NPS, and Sukanya Samriddhi accounts for the current fiscal year is March 31, 2024.
Every financial year concludes with the end of the tax-saving season. To keep such accounts operational, several tax-saving investing plans require account holders to make minimum deposits every fiscal year (by March 31). Some of these investment schemes include Public Provident Fund (PPF), National Pension System (NPS), and Sukanya Samriddhi Yojana (SSY).
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The regulations for these schemes require minimum yearly deposits to keep the bank accounts operational. If the individual fails to make the required yearly deposit, the account may be blocked, and a penalty is most likely to be imposed. The deadline for making a minimum deposit in PPF, NPS, and Sukanya Samriddhi accounts for the current fiscal year is March 31, 2024.
Let’s take a look at the minimum amount of money that an individual must deposit in their accounts every financial year in the aforementioned schemes by March 31, 2024, to avoid a penalty.
PPF account: To maintain an active PPF account, a minimum deposit of Rs 500 is required every financial year. Failure to submit the required yearly deposit amount will result in the deactivation of the PPF account. You can reactivate your PPF account by paying a Rs 50 penalty for each year of default.
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When a PPF account becomes inactive, lending and withdrawal facilities also become unavailable. The PPF account offers credit facilities beginning in the third year, while the withdrawal facility is accessible from the sixth year onward.
NPS account: For NPS account holders, one needs to deposit at least Rs 1000 in a single financial year in a Tier-1 NPS account. However, the minimum deposit rule doesn’t apply to NPS Tier-2 accounts. The NPS account is opened to save tax by investing an additional Rs 50,000 under Section 80CCD(1B) of the Income Tax Act.
This is to be noted: If you do not make the minimum payment into your NPS account, it will be blocked.
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SSY account: This is a tax-efficient investment option for individuals looking to save for their girl child. The SSY plan regulations require account holders to make a minimum deposit of Rs 250 per fiscal year. If the required deposit of Rs 250 is not made in the account during a financial year, the SSY account will be considered defaulted. The scheme regulations allow a defaulted account to be restored at any point before maturity.
Individuals would be obliged to pay Rs 50 for each year that they defaulted. In addition to the default cost, individuals would be asked to make a minimum payment of Rs 250 for each default year.
If the defaulted Sukanya Samriddhi account is not resurrected, the funds in the account will become due at maturity. An SSY account matures 21 years after the account was opened or when the female child marries after the age of 18.
Conclusion
As a result, account holders of savings schemes such as PPF, NPS, or SSY should check to see if they have deposited the minimal yearly amount in their accounts to avoid penalties. Or else, they may also miss benefits such as tax-free interest and other tax saving benefits.
