The Government of India has introduced changes to the National Savings Scheme (NSS) and Public Provident Fund (PPF), effective from 1st October 2024.
Key Updates:
- National Savings Scheme (NSS):
- NSS will stop paying interest after 1st October 2024.
- Withdrawals made after this date will still be taxed according to the applicable income slab.
2. Public Provident Fund (PPF):
- Multiple PPF Accounts: If you hold multiple PPF accounts, only one will remain active. Balances from other accounts will be merged. If cumulative balance exceeds the annual limit, accounts other than primary account will be refunded without interest.
- PPF for Minors: When a guardian holds both an active PPF account for themselves and another for a minor, the minor’s account will only earn standard savings interest until the child reaches adulthood.
- Non-Resident Indian (NRI) Accounts: NRIs must close their PPF accounts upon maturity, as they cannot be extended. Accounts extended beyond 30th September 2024 will not earn interest.
For unaffected accounts, PPF will continue to earn the prescribed tax-free interest.