As we approach the end of the financial year, many of your tax-saving schemes that require a minimum deposit every financial year are Public Provident Fund (PPF), National Pension System (NPS), and Sukanya Samriddhi Yojana (SSY). Failing to deposit a minimum amount in PPF, SSY, NPS will make those accounts inactive and one will have to regularize or unfreeze it before making fresh investments. The process of reactivating may be time-consuming and may also involve a penalty. In order to avoid this, make sure you have invested the minimum amount before the financial year ends.
Here’s What is the Minimum Payment that has to be Made, What You May Lose on Defaulting and How to Revive a Dormant Account:
PPF
If you fail to make the contribution by this date, then you will have to pay a penalty of Rs 50 for each year you fail to make the minimum contribution along with an arrear subscription of Rs 500 for each year. Further, if a minimum contribution is not made in the financial year, the PPF account will be treated as discontinued. A discontinued PPF account will not be entitled to the facility of obtaining a loan or making partial withdrawals unless the account is revived. A discontinued account can be revived before the end of its original maturity date. It cannot be revived after maturity, nor can it be closed before maturity. Added to this, a discontinued account cannot be extended. The PPF subscriber will get back the amount in the account only after the expiry of the maturity period of 15 years along with interest which will continue to be added each year (even in a discontinued account) on the balance at a rate fixed from time to time.
NPS
NPS Tier I accounts need a minimum contribution of Rs 1,000 per financial year, with no upper limit. There’s no minimum mandatory contribution for Tier II accounts. Defaulting will result in your Tier 1 account getting frozen. Account-holders who transact online can regularize it directly by paying a penalty of ₹100 along with Rs 1,000 as arrear for each defaulted year. Offline account holders should write to their point-of-presence (POP) to initiate the process of unfreezing.
SSY
To keep the Sukanya Samriddhi Account active, a minimum deposit of Rs 250 is required to be deposited in a financial year. If the minimum deposit is not made in a financial year, then it will be treated as a defaulted account. A defaulted account can be regularised before the completion of 15 years from the date of opening of the account of the SSY account. To regularise the account, you will be required to pay a minimum contribution of Rs 250, along with a penalty of Rs 50 for each defaulted year.
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