Dormant or Inactivation Clause For PPF, NPS and Sukanya Samridhi Accounts
Both salaried and business owners desire to get the best income benefits. The central government as well as private monetary deposit schemes offers tax benefits. The 2018 – 2019 financial years will end soon. Before the commencement of the upcoming financial year, a new announcement has attracted the attention of the people. Most people deposit money in the public provident fund or PPF and National Pension System and NPS accounts. Even deposits in the government schemes like Sukanya Samridhi schemes pave the path for tax deposits. But now the authority has announced that all such accounts will be rendered inactive if account holders don’t deposit a certain sum. With the development of virtual money transaction facilities, one can tackle this issue from the comfort of their homes. It has been highlighted that all people, must deposit their money before the end of 1st April,
Here is a quick look at the diffident accounts, which will be rendered invalid:
Sukanya Samridhi Yojana:
This is a central scheme that has been implemented by the Modi government. The scheme was implemented with the objective of offering financial assistance for female children. The program highlights that all registered parents must have a yearly payment of Rs. 1000 in the SSY account. But the government stated that this account will also be rendered inactive if deposits are not done before 1st April. This program also offers tax benefits under section 80C. In case any beneficiary does not make the necessary payments, then he/she will have to pay Rs. 50 for each yearly deposition that he/she missed out. It is only the penalty amount. Apart from this, the account holder will also have to pay the specified annual payments, which he missed. Beneficiaries under the SSY will not be able to attain any credit against deposited amounts.
National Pension System:
Like the PPF accounts, people can deposit a certain amount in under the National Pension System or NPS. Under this scheme, people will be able to deposit money according to the tire system. In case a person has an account in Tire-1, then he/she will have to pay an annual contribution of Rs. 6000. There is no upper or lower limit for people who open accounts in Tire-2. If the depositor misses any payment, he/she must pay Rs. 1000. Apart from this, an additional Rs. 500 will also be levied from the depositor as penalty. Additionally, depositors need to pay another Rs. 100 for all those missed yearly payments. This scheme offers tax benefits as well as Rs. 50,000 benefits as well. From next financial year, depositors must pay their contributions before 1st April.
Public Provident Fund:
The rules highlight that people need to deposit at least Rs 500 in the PPF account on a monthly basis. This deposition brings the annual deposit to Rs 1.5 lakhs. Any person, who deposits money in these accounts, will attain tax benefits as per section 88. If PPF account holders do not deposit their contribution on a monthly basis, then they will have to pay additional Rs. 50 as a penalty. Apart from this, inability to deposit before 1st April will make the account invalid. Once this happens, the account holders will no longer be able to make any financial transactions via the PPF account. After maintaining the PPF account for three years, one will be able to attain credit against the accumulated sum. But if the account is frozen, then this facility will no longer be available.