Public Provident Fund: PPF has remained one of the preferred investment options for the salaried class for long term purposes. It allows an investor to put up to Rs 1.50 lakh in a PPF account per annum and get income tax deduction under Section 80C of the Income Tax Act 1961. It offers a guaranteed return which is higher than the return on other comparable products.
What makes a PPF account so popular is the fact that it doesn’t require big sums to keep running. The account holder is required to deposit a minimum of Rs 500 every financial year to keep the account active.
However, failure to deposit this amount leads to the account being designated as inactive. It may be noted that even if a PPF account becomes inactive it continues to earn interest but you cannot avail other benefits like loan if your PPF account becomes inactive.
How to reactivate PPF account
For revival of the inactive PPF account, the account holder needs to submit a written request to the bank or the post office branch where you have opened the account. The application can be made any time during the 15-year period of the account.
You also need to deposit a minimum of Rs 500 for each financial year of the period when the account was inactive. Along with this, you have to pay a penalty of Rs 50 for each financial year in which the account was inactive. The cheque needs to be submitted to the branch along with the application.
On successful verification your PPF account will be reinstated. The account holders should know that this is only possible if the lock-in period hasn’t ended.