PPF a/c will be closed, NSCs encashed if holder turns NRI
IANS 30 October 2017
Amending rules on post office savings schemes like the National Savings Certificates (NSC) and Public Provident Fund (PPF), the government has notified that such accounts would be closed prior to maturity in case of holders changing their personal status to become non-resident Indians (NRIs).
 
The amended rules were notified in the official gazette earlier this month. 
 
The amendment to the PPF Scheme, 1968, says: "If a resident who opened an account under this scheme, subsequently becomes a non-resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes non-resident."
 
The interest payable would be up to the date of the account closure, it said.
 
A separate notification on NSCs said in case of a similar change of status of the certificate holder before the maturity period, "the certificate will be encashed, or deemed to be encashed on the day he becomes non-resident" and interest will be paid accordingly.
 
NRIs are not allowed in instruments like the National Savings Certificates, Public Provident Fund, Monthly Income Schemes and other time deposits offered by the post office. 
 
Asked to comment in this regard, an investment consultant said that it is unclear why NRIs are not allowed to invest in post office schemes.
 
Last month, the government had retained the interest rate on Public Provident Fund for October-December unchanged at 7.8 per cent, in line with the rates for small savings schemes.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
Comments
suman
4 years ago
good
PPM
4 years ago
Not sure why!! BJP government is always against the NRIs!!! During Vajpayee period, Jaswant Singh, as Finanace Minister removed many tax benefits available for NRIs when they move back to India as Redident Indians.
S Rungta
4 years ago
No where online can I find clarity on what does it means when the status changes to NRI? Does the interest rate change effect is retrospective? If yes, how highly unfair treatment to NRI's for their hard earned money.
PARSHA RAM
4 years ago
What is the rationale behind it? is it because interest earned is tax free? But then NRI can have other types of income which are tax exempt.
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