To give some relief to small savings account holders, FY 2019-20 deposit in PPF and SSY extended up to 30th June 2020.
Earlier when the last date for claiming deductions under Sec.80C was extended (FY 2019-20 extended up to 30th June 2020 for investment – How to do tax saving?), there was confusion whether the features of PPF and SSY was also tweaked or not. However, Government today announced these changes to PPF, SSY, and RDs of Post Office.
FY 2019-20 deposit in PPF and SSY extended up to 30th June 2020
Let us see the changes one by one.
# The subscribers of PPF and SSA may now deposit their savings up to 30th June 2020, which couldn’t be deposited in FY 2019-20 due to lockdown in the country.
# The revival fee/ penalty charges are waived off on the PPF, SSA/ RD accounts in which mandatory minimum deposit if not made up to 31st March 2020 subject to such deposit are made up to 30th June 2020.
# All those PPF subscribers, whose accounts were matured on 31.03.2020 (including one year window for extension), can now be extended up to 30.06.2020.
# You are allowed to do the single deposit for FY 2019-20 during the period of 1st April 2020 to 30th June 2020.
# To avail of this facility, you have to first give in writing to Post Office/Bank that you are not breaching the maximum limit (Rs.1,50,000) for FY 2019-20. Also, if later it is found that you breached the maximum limit, then your money will be returned back without any interest on it.
# The deposit will earn the interest from the date of deposit as it is applicable on that day of deposit.
# If you have not deposited any minimum balance in PPF and SSY and you wish to deposit the minimum balance or more than that (up to the maximum limit), then there will not be any default charge for FY 2019-20.
# For the purpose of loan and advance, the balance as on 31st March 2020 itself considered. Hence, this balance will not form the part of the eligible amount for loans and advance.
# The maximum and minimum limit for both PPF and SSY for FY 2020-21 will continue as usual.
# If your PPF account matured on 31st March 2020 and you are not able to extend may now extend the same after submitting the request before 30th June 2020.
Conclusion:-It is a good move by the Government to provide such a breather for the investors of PPF and SSY. But make sure that you follow the above rules properly before blindly investing.
Do remember that the interest rate of the last FY will not be applicable even though you are depositing for FY 2019-20. Hence, don’t think that you will get higher interest rates of last FY then the current lower interest on PPF and SSY.
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10 Responses
Kindly consider the following situation and guide accordingly:
1. It it that what ever amount is deposited between April and June, 2020 to SSY is considered as saving for the year 2019-20 automatically or some special procedures have to be followed.
2. If by mistake maximum amount is deposited for 2020-2021, whether it would automatically considered for the year 2019-20
3. If maximum allowed limit is deposited for the year 2020-2021, is it possible to deposit the saving for the year 2019-20 before June, 2020.
Dear Kumaraswamy,
1) It is you who has to declare while filing IT returns
2) As I said, it is up to you to decide towards which FY you wish to consider for taxation. For the investment purpose, it is with the bank to consider as per your request.
3) Yes.
What charges will I have if I make a withdrawal on a PPF account I do know that there is a penalty charges will I have a. Penalty charges now as well
Dear Prashanth,
For withdrawal or advance, there is no charges.
Any update on PMVVY which expired on 31.03.2020?
Dear Priyajit,
NO.
Hello Basu
Thanks for this informative write-up.
I have a query interms of distinguishing between between contribution for FY 19-20 or 20-21.
If I have contributed to PPF and SSA on 2nd April for FY 20-21, how would that be distinguished from FY 19-20 with this extension in place?
How will I show it as part my tax declaration for the FY 20-21?
Regards
Ayas
Dear Ayas,
If there is a shortfall for your last year tax claiming, then you can use the whole contribution or part of it for FY 2019-20 and remaining for FY 2020-21. The only caution you have to take is that the same investment can’t be claimed for a deduction for both the Financial Years.
Dear Mr. Basu,
If someone deposited on 01st Apr 2020 for PPF & SSA, will it cover under FY20-21?
Dear Swarnava,
It is up to you to claim it either for FY 2019-20 (if there is a shortfall) or for FY 2020-21.