Inactive PPF account? Follow this process to reactivate it

11 Jan 2021, 04:13 PM IST

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â€‹PPF in a nutshell

In the fixed income space, the Public Provident Fund (PPF) is a popular investment avenue among investors. A PPF account allows individuals to invest up to Rs 1.5 lakh each year and also provides a tax deduction under Section 80C of the Income Tax Act. The account has a validity of 15 years and the account holder is supposed to deposit a minimum of Rs 500 every financial year.

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â€‹When can your PPF account become inactive?

Failure to deposit the minimum amount of Rs 500 per financial year leads to the PPF account being designated ‘inactive’. One can reactivate the account by following the steps mentioned below.

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â€‹Written application

To revive the inactive PPF account, the account holder needs to submit a written request to the bank or the post office branch where the account is present. The application can be made any time during the 15 year tenure of the account.

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â€‹Amount to be deposited

The investor or account holder will need to deposit a minimum of Rs 500 for each financial year of the period when the account was inactive. The cheque needs to be submitted to the branch along with the application.

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â€‹Penalty

To revive the account, the bank or post office charges a penalty of Rs 50 for each financial year in which the account was in an inactive state. The penalty needs to be deposited along with the payment of the above-mentioned arrears.

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â€‹Approval of request

Once the application is submitted, the bank or post office scrutinises the application with their records. If the period of deposit (15 years) has elapsed, the account can’t be revived. However, one can access the maturity proceeds by paying the penalty.

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â€‹Points to note

The amount in a PPF account continues to earn interest even while it is inactive.
One cannot avail a loan against an inactive PPF account.

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â€‹PPF in a nutshell

â€‹When can your PPF account become inactive?

â€‹Written application

â€‹Amount to be deposited

â€‹Penalty

â€‹Approval of request

â€‹Points to note

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