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Can NRIs invest in Public Provident Fund (PPF) in India?

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Public Provident Fund (PPF) is one the best investment options in India which provides risk free & tax free returns (8-10%).

But, Can NRIs take benefit of this investment option? Let’s discuss in detail.

1. I am an NRI. Can I open NEW PPF Account?

No, an NRI can’t open a new PPF Account in India. However, he can maintain the existing PPF Account opened when he/she was resident.

2. I opened PPF account when I was in India but now I am working outside India. Can I continue with this PPF account?

Yes. If the PPF account was opened when you were resident, then you can continue with this PPF account even after you become an NRI.

Till 2003, NRIs were not allowed to contribute amount into existing PPF accounts opened when they were resident. However, in 2003, government allowed NRIs to continue investing in existing PPF account (notification (MOF (DEA) No GSR 585 (E) dated 25.7.2003)

3. How to deposit money in PPF account?

You need to invest minimum of Rs 500 each year in PPF account otherwise it will become dormant & you will need to pay a penalty of Rs 50 per missed year of investment.

You can issue cheque from your NRE / NRO account or you can transfer funds online to your PPF Account. Read my other article on – How to transfer funds online to PPF Account.

 

4. Can I close my existing PPF account, when I become an NRI?

No. PPF account can’t be closed before maturity except in the event of death.

However, you can withdraw full amount at maturity or make a partial withdrawal.

5.  Should I withdraw / extend at time of maturity?

You need to withdraw the balance amount at time of maturity.

NRIs are not permitted to extend the PPF account (with contribution). However, if you donot withdraw the balance at maturity, the account will be treated as “extended without contribution”

6. Can I transfer the PPF balance amount abroad / repatriate?

Yes. At maturity, you can withdraw the PPF balance and deposit in NRO account.  NRIs are allowed to remit /repatriate upto USD 1 million per financial year from their NRO account subject to certain procedures.

7. Do I need to pay any taxes on Interest earned or withdrawal amount?

In India, PPF fall into the category of E-E-E (Exempt-Exempt-Exempt) mode of taxation.

  • The annual investment into PPF account qualifies for a deduction under Section 80C
  • The interest earned on the PPF account every year is not taxable
  • The lump sum withdrawal at the time of maturity is not taxable

In fact, if you have any other taxable income in India, you can claim deduction of upto Rs 100000 for your investment in PPF under Section 80C of income Tax Act.

Tax abroad in your country of Residence

While PPF income doesn’t attract any tax in India, you might need to pay tax in your foreign country.  You might need to include / declare the income from PPF in your country of residence income tax return.

As per US tax laws, this interest income will be taxable and you can choose to pay tax each year or defer it till withdrawal.

For UAE NRIs, the situation will be different as there is no personal Income tax there.

Summary

  • NRIs can’t open NEW PPF Account.
  • But, if they have existing PPF account they can contribute money via their NRE/NRO account.
  • Interest earned is tax free in India but might be taxable in country of residence.

Read my other post on – Things you should know about PPF

If you have queries, please feel free to ask them in the comments section below. Please share the article with your friends.

If you have any queries related to this article or any other personal finance query ( Investment, Taxation etc), please comment below

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About wealth18

The author is a Chartered Accountant and loves to write about Personal Finance, Wealth Management, Taxation etc. Disclaimer - The articles on this website is for informational and knowledge purposes and should not be treated as financial advice, Please consult your financial advisor before taking any investment decision.

121 comments

  1. My status will change to NRI this year. I have ppf account which is maturing in 2014. My questions are :
    1) Can I extend the account ?
    2) If I do not apply for extension, does it automatically get extended ? How much year ?
    3) Will I be able to deposit money in extended years ?
    4) Will the deposit earn interest ?

    Thanks,
    Sulu

    • If you become an NRI & report that to bank :

      1) You cannot extend PPF account with Contribution. i.e. You cannot deposit fresh amount after maturity of 15 years.
      2) If you donot withdraw the balance at maturity, the account will be treated as “extended without contribution”
      3) No, you cannot deposit money in extended years
      4) Yes the Balance will earn intrest.

      You may consider to keep the PPF account as it is, if you are going outside India for a short term.

  2. Dear Vivek

    Now that, i have 16 lakhs in my hand. I am aged 60 and i’d like to have something set for my children. I am currently abroad and i would return shortly to india in few months. I have kept aside 16 lakhs for my children future. Yes, they are currently employed as well – abroad. But, i was thinking, when they are back in hometown, they need to have something set so that they wouldn’t have the difficulty of setting something new..

    I was thinking if could set something for them and by the time when they are back, they can live peacefully. Can you please advise some good avenues, where i can enter into safely for my children?>

    Jeet

    • Hi Jeet,

      Given your age as well as tax slab, I would suggest that you should consider some safe options like Fixed Deposits.

      If you are abroad, you can invest in NRE Fixed Deposit which gives approx 9% & is TAX FREE as well.

      When in India, you can again invest in Bank Fixxed deposit giving around 9% , but it will be taxable income. However, there will be no tax upto total income of Rs 2.5 lakhs, so if you donot have any other income, this FD interest will be tax free for you.

    • My friend have his old PPF accounts in India opend when he was in India and resident of Indian. Now he is Citizine of USA. His properies and welth is in India. His interest Income is Taxable. He may require to sell his properties.
      He has following query.

      1) Can he deposit in PPF? What maximum amount per Year can he deposit ? Can he get interest on deposit account ? Can he continue his account to how many years ?
      2) When he sell his properties and wants to keep all money here can he ?
      3) Can he invest in Tax Saving FIX deposit ?
      4) Can he take/continued his MediClaim insurance in India ?
      5) Can he invest in Mutual fund, other insurance product ? ICICI predutial, HDFC preducial rtc

      • Hi Vadilal,

        1) Yes if the PPF account was opened when he was resident, he can continue to invest Rs 1.50 lakhs per year upto the maturity period.
        2) On selling his properties, all proceed should be in his NRO account(based in India).
        3) He can invest in NRO–5 year tax saver Fixed Deposit which will be eligible under Section 80C of Income Tax Act, 1961
        4) He need to inform the insurance company that he moved outisde India. Otherwise, what is the use of the medical insurance if he is not travelling to India for medical. Ideally he should take medical insuranc in US.
        5) Many mutual fund house donot allow US investors due to extra formalities.

  3. I am a US citizen/OCI card holder now resident in India for last two years. It has been 1.5 years since I received my OCI card as well.
    It would really help if you could advise if in genera OCI card holders are considered NRI or resident Indians for the purpose of PPF, taxes, investments and other such programs.
    Thanks.
    Sagar

  4. Dear Vivek

    I have a PPF Accounts in State Bank of India, And now my status is NRI. My question are :

    1. If I do not withdraw the balance on maturity, So how many time i can extend my account without contribution ?
    2. Will the deposit earn interest during the extended years ?

    Thanks & Regards
    Abhay

    • Hi Abhay,

      1) NRI are not eligible for extension on the PPF account. However, if you leave the PPF account as it is (do not withdraw money) then the account will be considered ‘extended without contribution’. It can be done in blocks of 5 years for an unlimited period of time.
      Extended without contribution means that you will not have to make the minimum yearly investment of Rs 500.

      2) Your PPF account will continue to earn interest at the prevailing rate

  5. Hi Vivek,

    I became an NRI a few years ago and have continued my PPF account that was set up as a resident. I have also continued to make contributions to this account. My questions are:

    1) I don’t recall the date I opened this account and so cannot calculate the 15 years maturity. How does this impact my account ?
    2) I am also not sure if I informed the bank about my NRI status. What do I do now?
    3) in case it’s been longer that 15 years, what are my options as I have continued to make contributions?

    Thanks

    Shalini

    • Hi Shalini,

      if you have not informed your bank about your NRI status, the PPF account will continue as usual. You should get a form to extend the PPF account after 15 years.

      As a resident, you can extend the PPF account in block of 5 years & contribute the amount as well.
      If your account has NRI Status, you cannot contribute after 15 years.

      You need to check the account opening date, so that you can decide to withdraw money at the time of maturity.

  6. Hi Vivek,

    I am an NRI and my PPF account will be maturing in near future. After withdrawal, I will have to deposit the amount into my NRO account. My question is whether the amount will be subjected to TDS once deposited.

    Thanks,

    Siba

    • Hi Siba,

      You can deposit money in your NRO account. There will not be any TDS at the time of credit of this money into your account.

      However, if you earn any interest on your NRO account balance, that will be subject to TDS.

  7. i renewed my ppf account after becoming nri. what i have to do now

    • Hi Kuljit,

      You cannot do anything now. I think you have not communicated to bank that you have NRI status now.May be at the time of maturity, you can withdraw the money.

  8. I was working in India in two different MNC during this tenure 1)Till Aug 2011 2)Till Jan 2013 .I had two seperate PF accounts.Now i resigned that job and moved abroad .But I am not working there.Now please let me know whether can i close both of the PF accounts from out of country.Kindly advise.

    • you need to contact your previous employer’s hr and they will help you to withdraw amount.
      You need to send the pf withdrawal form, advance stamped receipt and ID & address details.

  9. i was unknown about NRE/NRO accounts, can i now convert my resident accounts to nro accounts. After a lap of about six years should i convert my accounts to NRO from current financial year or from the date of becoming NRI. Is it possible by online request to bank and what will be consequents now, please guide me in detail

    Waiting for your valuable advise.
    kuljit

    • Hi Kuljit,

      You can convert your Normal savings account to NRO account anytime by submitting a written application with copy of your passport & VISA.

      Do you have any income in India? Only then NRO account is beneficial?

      If you transfer funds from overseas, then NRE Account is better . As any interest earned in NRE account / NRE FD is tax free in India.

      • Hi Vivek,
        I have a similar situation, I moved abroad 1.5 years back, but I still hold a resident account. I have funds in INR in my resident account from when I was resident, I was wondering if I can convert my resident account and the funds in it to NRE account and not have to pay any TDS towards the interest earned. I don’t have any earnings from India since I moved abroad and do not wish to transfer the funds abroad. I make regular payments in INR e.g: Utility Bills.

        Please advice.

        • Ideally, you need to convert your resident account to NRO account.

          Any interest earned in NRO account will be subject to TDS. But you can file return to claim the TDS back.

          However, many people do keep their resident account as it is even after becoming NRI. That is not correct, but they take risk if the amounts are not very large.

  10. Hi i am rohit .i am in merchant navy..

  11. Hi Vivek
    I am Rohit. I am in Merchant Navy.Its been 5 years since i have been in this profession.Last ship i joined was on 13-June2013 and i signed off from that ship on 15-Dec-2013 which indicates that i have completed around 184 days in foreign which further indicates that i have completed my NRI time for last financial year.Iopened my PPF account on 26-May-2014 but i was unaware of the NRI criteria.I have planned not to go on ship till mid of Oct 2014 as a result of which i will not complete my NRI time for this financial year but in future i may or may not become NRI as my profession is such.In most of the cases i will become NRI.

    PPF guidelines clearly indicates that an NRI cannot open a PPF account .However if a resident of india opens a PPF account and becomes NRI during the tenure of PPF then he can continue with his/her account.

    My ques. is.

    1)Since I was NRI for the last financial year .Was i eligible to open a PPF account as per PPF rules?

    2)If i continue to deposit money in my PPF account.Is it possible that i will face any problem if i will withdrawl money after maturity.

    3)Can i further extend my period after 15years.

    • Hi Rohit,

      You are right that NRI cannot open a PPF account. But as you will be in India for multiple times of the year and will have a bank account in India and Indian residential address proof, it will not cause major problem in withdrawing the amount.

      As SBI official is not going to ask for your passport to determine the residential status. As long as you have Indian ID & address proof & you are physically in India for withdrawal, it should be fine.

      Also. the definition of Non-Resident is different under Income Tax Act & under FEMA

      http://wealth18.com/check-if-you-are-resident-or-non-resident-under-income-tax-act/

  12. Hi Vivek
    In addition to my above post dated 10-Sep-2014 7:34am i would like to add that i have PPF account in State Bank Of India.

    Please advice me if i am wrong in any of the steps involved in PPF

    should i continue to deposit money in my PPF account or should i stop.

    Thanks

  13. Hi Vivek,

    My wife opened PPF account in SBI when we visited India and we’re not aware of the NRI can’t open PPF.
    After few months she came to India and stayed for around 1 year. We are contributing amount each year to the PPF account.
    My Questions are:
    1> Will be there any issue on matuarity to check whether she was NRI or not at the time of opening?
    2> Can we withdraw the maturity money after 15 years and credit to saving account in India?

    • Hi Rajiv,
      1) if at time of maturity, she is in India then, I donot think there will be any problem. as normally they will not ask your passport to check if you are NRI or not. As long as you have Indian ID & Address proof, it can work.

      2) After 15 years, the money can be credited to saving bank (normally with the same bank).

  14. During my visit to india i opened nro account. i have pension, rent, agriculture , intrest income in india .How I can save tax by depositing in saving scheams. What are the savings on which i can claim rebate. can i claim rebate on ppf ?.Please advise me.
    Thanks
    Kuljit

  15. Sir ,
    As asked by you my total income in India from pension and interest is about Rs 700000.00 including Rs 100000.00 from agriculture and Rs 80000.00 from rent . Detail is given in above reply .Pl advise how I can save tax
    Kuljit

  16. Hi Vivek,
    I am an NRI and I have some queries about PPF account with SBI in India:
    1) As you mentioned that an NRI can continue without contribution. Do we need to tell Bank that our status has changed so they allow the account to continue without contribution? If not, then how come Bank will know that we don’t need to deposit min. amout per annum?
    2) My daughter also has PPF account and I am her Guardian as she is minor. she doesn’t have any bank account in India or abroad. If I continue her account as “Continue without contribution” then after maturity how can I get the money i.e. cheque or DD will be issued in her name and she doesn’t have any account. Else please suggest if I get her account matured before she gets major so that cheque/DD is issued in my name and can be deposited in my NRO account ?

    • 1) you need to deposit minimum amount till maturity. As NRI, after maturity, you can extend PPF account without contribution. You can send them the letter about change in residential status.

      2) after maturity, they normally ask bank account to credit the maturity amount. the amount will be transferred in her name. You can open a minor account in her name.

  17. Sir,

    Can Singapore resident NRO account holder invest in Mutual Fund ELSS scheme under section 80C? Her spouse is Singapore citizen. She gets rental income in India. So she wants to save tax.

    Please clarify.

    Regards,
    Jay

  18. Dear Mr. Vivek,

    Kindly clarify the following:

    1. I am a NRI, my PPF account may complete 15 years next year; will the bank keep the balance in PPF account and accumulate interest till I withdraw, let us say another 10 years? or they will credit give to my saving account automatically on maturity?

    2. I have sold a house purchased with NRI funds and now the sale proceeds are in my NRO deposit, can I convert these funds into NRE, if so, please suggest the procedure to follow.

    I have seen your replies, it is a great help you are doing NRI community, many thanks.

    Best regards,

    V Tirupathi Rao

    2.

  19. Sir,
    Currently I’m having a NRE/NRI status but my family is residing in India only. Can I still maintain my SB account in India & invest in some MF / Shares / Bonds etc. in India from my SB account in India?

    Regards
    P S Rajan

    • Many people do that but it is not advisable.
      When you become NRI, you should convert your Saving account to the NRO account.

    • Hello ,

      Residential status of an individual or HUF or a company is of great importance in Indian Income Tax Act as the liability to pay tax in India does not depend on the nationality or domicile of the Tax payer but on his residential status. Residential Status is determined on the basis of physical presence i.e. the number of days of stay in India in any year. An individual is resident if any of the following conditions are satisfied: (i) he stayed in India for 182 days or more during the previous year, or (ii) he stayed in India for 365 days or more during the four preceding years and stays in India for at least 60 days. 182 days in case of an Indian citizen or a person of Indian Origin coming on a visit to India or 182 days in case of an Indian citizen going abroad for an employment during the previous year. Otherwise he is Non Resident. Hindu Undivided Family (HUF) or firm or other Association of persons is resident of India except in cases where the control and management of its affairs is wholly situated outside India in the previous year A company is resident in India if-it is an Indian company, or during the previous year, the control and management is situated wholly in India.

  20. Hi Vivek,

    Thank you for your posts. They are really helpful and I appreciate your response.

    I am on NRI status and I want to know if I can open a PPF account in India. In many of the queries you have mentioned that we cannot do that but does that mean that an NRI cannot open PPF until the status is changed or is it something with your physical presence and cannot be done being abroad.

    I will be travelling to India for 1 month, can I open an PPF during that time with Indian residential proof as after certain number of years I will go back.

    Regards,
    Raj

    • Hi Raj,
      As per laws, NRI cannot open PPF account.
      However, during your visit to India, if you fill the form mentioning that you are Resident in India and submit Indian address proof, the bank will open the PPF. as they have no way to know that you are NRI.

      Disclaimer – I am not suggesting that you fill wring details in the form.

  21. Hi Vivek,
    I have a question related to funds in India and NRI status.
    I had come to U.S on last year 2014 with work permit visa. I have a SBI savings account in India which is linked with my housing loan account and auto deduction happens every month for the EMI.

    Now, I have become a NRI(living in U.S) and still my wife stays in India (will leave India on Mar 2015). For eg., I have funds of around 5 lakhs in this existing SB account which was earned as part of PF account settlement & gratuity settlement. In addition to this, i have also some funds which was earned during my employment in India.

    1. Could you please clarify whether do i need to open a new NRE account ? or do i need to convert existing SB account into NRE/NRO account TO MANAGE EXISTING FUNDS AND CONTINUE PAYING HOUSING LOAN EMI?

    2. Since i have housing loan EMI deduction linked with SB account, can i pay the EMI as it is from this account as these funds were earned when i was working in India & through PF, gratuity settlements.

    3. If i open a new NRE account, is it legally allowed to transfer money from this to existing SB account for paying EMI?

    4. Till the time i open a NRE or NRO account, Can i legally transfer my earnings in US directly to my wife’s or parents SB accounts and without transferring to my SB account?

    Since, i am new to this status, i kindly request you to help me for all of these queries.

    Thank you,
    Saravanan V

    • 1. Ideally, you should convert your existing Saving Account to NRO account. However, even if you donot convest and if the amounts are not huge, there should not be much problem. The only challenge will be to manage that account from overseas unless you have other family in India where the account address is maintained.

      2) You can continue paying the SMI from your SB Account

      3) Once you oepn an NRE Account, you can send money to NRE account from overseas. You are also free to transfer money from NRE Account to resident SB account.

      4) You can alsways transfer funds from your overseas account to resident bank account of your spouse / parents.

      As as NRI, it is better to open an NRE Account as the interest are tax free and money is fully repatriable. Please see the links below:

      http://wealth18.com/nri-bank-accounts-nre-nro-fcnr/

      http://wealth18.com/nre-fixed-deposit-rates-comparison-nre-fd-rates/

  22. hi have few queries will be of great help if you advice me

    1) i Took up a job in uae on sep 2014 before that i was working in india so am i a nri i belive i have been for 175 days if calculated from 1 april 2014 keeping my depature date as 22 sep now my query is can i open a ppf account back in india before march 31 2015 by being there in person if required.

    2) How is your residency calculated according to fema or it act for ppf
    3) What if i open and authorities come to know of the what are the legal complications, also can change my staus after a year will it be fine
    4) If i become a resident will have to pay tax for my salary earned here in uae
    5) Can i open the ppf account whit oci card if allowed
    6) What are the investment options for NRI
    7) I have investments in stocks and lic will it be affected if i do not declare my status as nri
    Thanks in advance

    • Hi Shankar

      1) As you are out of India for more than 182 days for employment, you will be Non-resident. As an NRI you cannot open PPF.
      However, if you have an Indian address and you mention in the form that you are resident, you can get away with the requirements, but that is not 100% legal.

      2) re residency status, check the link below
      http://wealth18.com/check-if-you-are-resident-or-non-resident-under-income-tax-act/

      3) If they find out, I believe they may ask to close the account and refund the money

      4) Once you become a resident in India, then I believe you will be working in India and will not have UAE salary. please clarify your query?

      5) You cannot open PPF with OCI card? have you got an OCI card in few months ?

      6) As an NRI, you can invest in Shares, Mutual funds, NSC, NRE FD etc

      7) If you are planning to go back in short term, then it may be fine for not changing the status, otherwise you should change it.

  23. Sir ,
    I am an nri and unknowingly I have opened an PPF account this year .Can you please suggest me what should be done ,whether I have to continue with it or can I transfer the amount to my wife s ppf account who is not nri.

    regards ,Abhijit.

    • Hi Abhijit,
      You cannot transfer your PPF account to your wife’s PPF account. Now that you have opened it, you can keep continue it. Hopefully you have an Indian address where communication can be made.

  24. Hi Vivek,

    I had opened PPF account in year 2000 and contributed till 2012.Got work permit and worked abroad from Sept.2012 -Sept.2014.During this period didnt deposited amount in PPF.Now,I will stay in India only and no plans to work abroad.
    My query is,can I deposit amount for the last two years.Secondly,can I extend the PPF account for block of 5years.

    • you need to deposit minimum amount of Rs 500 + Rs 50 penalty for each year.

      You can extend the PPF account for a block of 5 years.

  25. Dear Vivek,
    I hv PPF Account ,and now i m hving NRE status. Can i open NEW PPF account in the name of my kids ( minor aged 11 ).

  26. Sir,
    My friend opened PPF account in 2011 with yearly 70,000….but at that time 70,000 is the maximum limit…..now after 4 years, maximum limit is 1.5 lac….so can he extend invest now to 1 lac or 1.5 lac….

  27. Hi Vivek,

    I came across this post and it was really helpful in understanding some finer points of the PPF rule. I however had a couple of questions,

    1) I have a PPF account which was opened while i was a resident. Now that I’m an NRI and I cannot extend the account, upon maturity, can I transfer the funds directly to my parents accounts (who are residents). Or would it have to be deposited to an account in my name (NRE/NRO)?

    2) Would you happen to know about the AMT in the US and the implications of PPF earnings / amounts on the same?

    3) Also would you happen to know about the FBAR in the US and the implications of PPF declaration on the same.

    • Hi Sameer

      1) The maturity amount needs to be credited in your name. It will be credited in your NRO account or normal residnet account.
      2) I am not very sure about the inclusion and calculation of US AMT.
      3) The FBAR must be filed by US residents, green card holders and citizens if the aggregate of their bank and financial accounts exceeded USD 10,000 (approx Rs 6.3 lakhs) at any time.

  28. hi vivek,

    i am in UAE for 3 years. already passed 1.5 year. after 3 yeaR I will again in india. so can I open PPF account now.

    • As an NRI, you cannot open PPF account.
      However, if you have address proof in India, you can try open PPF account when you are in India, with your Indian address.

  29. Hi Vivek,

    I am in US. I had few questions:

    1. If I invest money in India in FDs or anyother investment plan, will the interest be taxable in India or USA?
    2. Is there a limit how much money I can gift to my parents per year?

    • 1)Unless you invest in any tax free instruments, the interest will be taxable in India.
      Also, the interest will need to be show in your US return, however, you can claim any tax paid in India because of DTAA between US & India.
      2) There is no limit for giving gifts to parents.

  30. Hi,

    I recently graduated with my master’s degree from an institution in the US. I have been staying there for the past 2 years for the same. I had some income as an intern for 7 months in the year 2014 (may-december).

    I have a few question:

    1. What is my tax liability on this income incurred in the US?

    2. What is my residential status? I have been away from india for a majority of the past 2 years but have never been employed full time there. My internship was part of my ‘curricular practical training’ for which is accounted for as part of my coursework.

    3. I will soon start working full time and plan to open an NRE account in India. Can I open both NRE and NRO accounts?

    4. I have a PPF maturing in 2018. Where can I deposit that maturity amount? Will the maturity amount be taxed on depositing it in the NRE or NRO account?

    5. Can I gift the entire maturity amount to my parents or can I make a fixed deposit of the same?

    Thank you for all your help. Please reply at your convenience.

    Thanks,
    Nimit

    • 2. As you are out of India for more than 182 days , you will be treated as Non resident.

      http://wealth18.com/check-if-you-are-resident-or-non-resident-under-income-tax-act/

      1.The Income will be taxable in US and not in India.

      3. You can open both NRE & NRO at the same time.
      http://wealth18.com/nri-bank-accounts-nre-nro-fcnr/

      4. Do you not have any resident account with the PPF. If not, you can get the amount credited in your NRO account. there is no tax on crediting the amount. However, any interest in NRO account will be taxed.

      5. You can make FD for the same amount if you wish. Or you can give it to your parents. its your choice.
      If you make FD in your name as NRO FD , it is taxable. But as your income in India is below taxable limit, you can claim refund for that tax deducted.

  31. Please reply to my questions at your convenience

  32. Is the “extension without contribution” option for the PPF account available specifically to NRIs? My bank tells me that I will have to close the account on maturity since I am an NRI. Is there any official documentation issued by the Government of India that settles the issue of availability to NRIs of the “extension without contribution” of PPF accounts? I would like to see this documentation before I respond to what the bank authorities told me about the need to close the account. Thank you for your help.

    • Hi Tejas,

      If you donot withdraw the balance at maturity, tha bank has no option but to treat the account as “extended without contribution”

      • Thank you, Vivek.
        1. Is there any official documentation that supports what you are saying?
        2. What if they discover later that I am an NRI and did not close the account as per their expectation of what NRIs should do?
        3. Will they keep crediting interest without my requiring to fill out any form or without my explicitly asking them to credit interest?

        I want to be prepared for any issues that may arise. That is why I am being very careful in handling this.

        Thank you.

        • I was asking for official documentation on “extension without contribution” specifically for NRIs.
          I know that “extension without contribution” is allowed for resident Indians. Thank you.

        • Hi Tejas,

          It is not specifically written in law or rules.

          However, you can check other expert’s view published in Times of India
          http://timesofindia.indiatimes.com/nri/other-news/FAQs-All-about-PPF-accounts-for-NRIs/articleshow/10569464.cms

          • Thank you, Vivek. Please read the last sentence below. It would be great if I could know where this rule book is. If you don’t know about it, it is fine. It is unfortunate that rules are not laid out clearly by the Government of India. So every bank has its own interpretation of the rules which is sometimes detrimental to the interests of depositors. If the bank refuses to pay interest in the “extension without contribution” period, whom should I approach?

            If you are an NRI at the time the deposit matures, you would need to withdraw the balance. An NRI is not eligible for extension on the PPF account. What happens if you leave the account unattended past the maturity date? “In such cases the account will be considered ‘extended without contribution’ in blocks of 5 years for an unlimited period of time. Extended without contribution means that the NRI will not have to make the minimum yearly investment of Rs 500. His account will continue to earn interest at the prevailing rate,” says Shanbhag adding, “We hear of instances where banks allow NRIs to extend the PPF account only for 2 blocks of 5 years or 3 blocks of 5 years. But according to the rule book the extension can be made for an unlimited period of time.”

          • Hi Tejas,

            I could only find the following:

            An amendment was made to Rule 3 of PPF Scheme 1968 vide MOF Notification No. GSR 585 (E) dated 25.7.2003; Non Resident Indians are not eligible to extend/continue PPF account after maturity.

            It has been clarified by the Ministry of Finance that accounts opened under such category cannot continue beyond maturity; therefore any subscription made by the depositor is irregular and not entitled for interest. Amount deposited after maturity, shall be refunded to the account holder without interest. [MOF letter F No. 3/4/2012-NS-II dated 16.7.2012]

            As per this letter, it seems that interest will not be given for any amount deposited after maturity. I am not sure whether the interest will be paid on balance amount. I could not find the actual circular / notification link. Apologies…

  33. Hi Vivek,
    I am an NRI, and i know that an NRI cant invest in PPF. But is it possible that i can open a PPF account for my mother(who is a housewife and dependent upon me) and enjoy the benefits??

    Thanks
    Arun

    • If your mother is not MRI, she can open PPF in her name. Make sure that you submit the nomination form as well.

  34. My son has opened PPf a/c 2 august 1997 when he was a resident and he has become an nri after shifting to usa . he has been contributing for ppf from his agriculture income and other savings. after 15y ears he has extended it and earning interest since he is having address and other assets.He is having NRE ACCOUNT IN SBI. what should i with his PPF amount or still continue contributing from his source of income please advise S.SANTHANAM

    • Ideally NRI are not allowed to extend the PPF account. however, because he has not changed the residential status in his PPF account, the bank official did not know about it.

      On maturity, the amount will be credited into his resident bank account.

  35. PLEASE ADVISE FOR THE ABOVE QUERRY SANTHANAM

  36. hello sir
    i am staying in saudi arebia since september 2014.i have opened a ppf account in SBI in march 2015 with a deposite of 1.50000.The money was deposited in ppf from my existing saving account of SBI.i was unaware of fact that nri cant open new ppf account.

    sir my query is
    can i continue to deposite in ppf this year also from my nre account
    or
    can i deposite amount in my SBI saving account from which i can transfer the amount to ppf by cheque.

    thanking you in anticipation.

    • Hi,
      Do you intend to go back to India in couple of year (specially before PPF maturity)?

      As per the rules, NRI cannot open PPF account. I am assuming that in the form, you have given Indian address proof etc, and that’s why they opened PPF account for you.

      As long as you have Indian address details, banks are not that strict.

      it is better to deposit money in PPF account from your resident SBI Account.

  37. Hi,

    I am in India now, came from US for a month and i opened a PPF now and i am planning to go back to US in a week, is it possible for me to contribute amount to my PPF(less than 70000/year)

  38. I was in staying in India till I moved aboard about a year back and I opened my PPF account in 1990 and after maturity, I have extended for 5 years, 5 years (twice) and the same is due on 31st March, 2016.

    My questions are,
    1.) Can I renew the account on maturity by submitting Form H?
    2.) If I can renew my PPF account, then how do I pay the amount (through a local savings account or NRO/NRI account)?
    4.) How many days does an individual gain the status of an NRI?

    Thank You!

    3.)

  39. Charlesraj

    Iam NRI working in Thailand, four months before my wife came for visit to here (Tourism Visa 60 Days). So my wife is eligible for open the PPF account.

  40. hello sir

    im 42 yrs. old and live in italy , i do not have a any bank account in india, my annual earning is 7 to 8 lacks and i want open nri acount in india (my citizen is a indian), witch bank is good for nri account, and i want do investment in PPF, and give me a good advice for my future pansion time whan i will comebake to my india,

    thanks.

  41. Iam little bit confused about my NRI status so could you please suggest me for my PPF investment.

    Only I spent some time in US, my wife and kids were in India, As per My Passport Details My US Spent Time is below:
    30Jun/2014 – 08Sept/2014
    23Nov/2014 – 08Nov/2015
    08Dec/2015 – 13Feb/2016

    Now i am in India and again I have plan to go US end of April 2016 for few years with my entire family but would keep on visiting India for 1 month once in a year. And after few years like 3 or 4 years I will permanently come to India.

  42. Hello,
    I opened a PPF a/c in 2014 (13 more yrs to go!), and every month/year I pay some money by online transfer (i.e. from SBI saving a/c to SBI PPF a/c). My PPF a/c and savings a/c are linked. In near future (in 2 months) I will leave India for a 3 year job in other country, can I still pay/contribute PPF online? online is easy as no OTP is needed for transfer (both PPF and Savings a/c are with SBI and online trasnfer is easy) If I do so will it be a problem during maturity?
    Thanks

    • If you are going for 3 years then there should not be any issue at maturity., You can continue transferring money to PPF online.

  43. Continuation of my previous question:
    Or do I really need to open a NRE a/c before leaving India? I mean do I need to transfer only from my NRE a/c?

    • No, you can continue transferring money from Saving account.

      You can open NRE account when you are in India or abroad. However, please avoid opening NRE account in the same bank. otherwise they will ask you to convest existing saving account to NRO account.

  44. Continued…
    Do they find out that I trasfer money from foregin?? DO they try to find that where the money comes in to saving bank a/c of SBI? (I transfer from this a/c to ppf a/c online?)

  45. Can PPF maturity amount be transferred directly to NRE Account?
    PPF investment was made when I was Resident, now im NRI, I have closed down my NRO account, I have NRE account in use, so Can the maturity DD amount be transferred to NRE account directly ??

    • Hi Hemali, PPF maturity amount can not be credited directly into NRE Account. You cannot deposit local Indian DD into NRE.

  46. Meghna Phillips

    Hi! Vivek,

    According to your earlier chats with NRI’s, I have understood that an NRI is a person who lives abroad for more than 180 days. (In my case I have become a permanent resident of Canada and have been living here for 9 months which makes me an NRI) My queries are below:
    1. My husband and I had opened PPF a/c’s 15yrs ago and the accounts have matured on 31st March 2016. What is the process of withdrawal of amount from the account? Do we need to physically go to the bank and close our account or can it be done by sending them a letter/ or online? and how can the funds be transferred into our account? (we hold a resident a/c in India since there is some earning in India)
    2. I had opened 2 PPF a/cs for my two children 3 years ago, they are also NRI’s now. Can I close their accounts before maturity? If so, can I do it remotely from Canada or do I need to visit the bank and branch where their accounts were opened. If their accounts are closed where will the funds be transferred since the children do not have any account in India.
    Thanks for your time. awaiting your response

    • Hi Meghna,

      1) if you have any relative, you can ask them to visit the branch with your application to transfer the maturity amount into your account. In addition to application, also give an authorisation letter.

      2) You cannot close the PPF account before maturity. As the account was oepned before them becoming NRI, you can continue depositiing the amount

  47. Hello vivek sir

    We hav opened ppf account in.2010 at that time we were in india..in 2012 we becm nri…now legilly we can continue ppf accout…n should we inform this to bank?

    • Hi Reena, yes as an NRI you can continue investing in PPF. The restriction is only for opening a new PPF or extending on maturity.

  48. Can you tell me the definition of Non Resident in PPF Act? I was non resident in last 8 years. Last year I came back. Till when I’ll remain Non resident.
    I still have Indian Passport only.

  49. I’m not sure of the original date of opening my PPF account. It was either 2000 or 2001. Initially, i twas with SBI but I later moved it to ICICI due to the convenience of net banking. For the past two years, I have now been working abroad but have continued to contribute to the account, every year.

    Considering that the 15 years of the account are completed whether it was 2000 or 2001, can I just transfer move the entire corpus in PPF, to my NRO account, since I have the net banking option? Or, are there some other formalities that I would need to complete before I can withdraw / transfer this amount?

    Also, if I completed 15 years in 2015, will I need to wait for the next 5 year window to be completed before withdrawing or I can withdraw it any time now?

    Thanks in advance for your response.

    • Hi Sarika, Normally the bank need Form H to extend the PPF duration. If you have not submitted abnd extended the term, you can request for PPF withdrawal on maturity.

      Please get in touch with your ICICI custoemr service to check the dates. Normally they will pay the amount to the saving account linked to the PPF Account.

  50. HI,

    I had opened my PPF account after became NRI, Recently, i know that its not a legal to open PPF account after became NRI.

    MY PPF account 3 years old and i have already deposit 3 lac.

    what should i do now, can i close or can i withdraw all money?

    Rikesh Patel,

    • Hi Rikesh, The banks are not so strict about this rule. Now that they have opened the PPF account, if you wish you can continue investing.

  51. Hi Wealth18 team,

    As per the post being a NRI I can’t open PPF account. My wife is homemaker and she is currently in India. I am transferring funds to her account from my NRE account on monthly basis , can she deposit in her PPF account.

    Will there be any tax implication? Will bank ask for source for income?

    I read there won’t be gift tax for giving money to your spouse. Please advise on this. Thanks in advance.


    Rohit

    • Hi Rohit,

      Yes you can give money to your wife and she can deposit it in her PPF account. Bank will not ask for source of income.

      There is no gift tax for money given to spouse.

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