Deadline Alert: Non-Deposit in Sukanya Samriddhi, PPF, NPS Accounts by March 31 Incurs Penalties—Rule Details Inside
By Lokmat English Desk | Published: February 26, 2024 11:32 AM2024-02-26T11:32:28+5:302024-02-26T11:32:28+5:30
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Investors participating in the Sukanya Samriddhi Yojana (SSY), Public Provident Fund (PPF), and National Pension System (NPS) are required to maintain the activity of their accounts by fulfilling a minimum annual deposit requirement. Failure to meet this mandatory deposit may result in account dormancy.
The deadline for depositing the minimum amount into PPF, Sukanya Samriddhi, and NPS accounts for the ongoing financial year is set for March 31, 2024. This deadline holds significance not only for account maintenance but also for tax considerations. Notably, the government has revamped the tax system to enhance its appeal, adding further relevance to timely deposits.
In the recent tax reforms, effective from April 1, 2023, the government has revised the basic exemption limit from Rs 2.5 lakh to Rs 3 lakh. Additionally, the inclusion of standard deduction in the new tax structure has further streamlined the system. Consequently, individuals with income up to Rs 7 lakh are now exempt from taxation.
Individuals who are currently invested in tax-saving schemes such as PPF, Sukanya Samriddhi, and NPS may have considered or already made the switch to the new tax regime. However, opting for the new regime means foregoing tax benefits on investments in these schemes. Therefore, investors need to carefully evaluate the trade-offs before deciding on their tax-saving strategies.
Individuals in this situation might perceive that they no longer require investments or deposits in these schemes for the financial year 2023-24. However, it's crucial to note that failing to meet the minimum deposit requirements in these accounts can result in fines. To circumvent penalties, it's essential to adhere to the minimum deposit criteria for each scheme.
For the Sukanya Samriddhi Yojana (SSY) scheme, a minimum deposit of Rs 250 is obligatory each financial year. Failure to make this minimum deposit designates the account as default. To reactivate the account, a default fee of Rs 50 per year of default is required to be paid. This fee accrues for each year the account remains in default status.
As per the PPF Rules of 2019, a minimum deposit of Rs 500 must be made into a PPF account every financial year. Failure to meet this minimum requirement renders the PPF account inactive. To reactivate the account, a default fee of Rs 50 per year of default must be paid, alongside the minimum annual deposit of Rs 500.
Investors are mandated to deposit a minimum of Rs 1,000 into their NPS account each financial year. Failure to fulfill this minimum deposit requirement leads to the freezing of the account. To reactivate a frozen account, a one-time contribution of at least Rs 500 is required. This contribution ensures the account remains active henceforth.
