Government Clarifies Applicability of New SCSS and PPF Rules

Key Takeaways

1. The new rules for SCSS include a penalty of one percent of the deposit if the account is closed before the expiry of one year of the investment.

2. The scope of retirement benefits has been extended under SCSS, and the definition of employee’s retirement benefits now includes government employees who died on the job.

3. For PPF, on premature closure, interest in the account shall be allowed at a rate which shall be lower by one percent than the rate at which interest has been credited in the account from time to time since the date of opening of the account, or from the date of commencement of the current block period of five years.

The new Senior Citizen Savings Scheme (SCSS) and Public Provident Fund (PPF) rules apply to both existing account holders and new account holders. The Department of Posts issued a clarification on November 29, 2023, regarding the applicability of the amended rules for SCSS and PPF.

According to the clarification, the amendments related to SCSS and PPF will be applicable to both existing account holders and new account holders. However, the amendments in the National Savings Time Deposit Scheme will be applicable only to new account holders.

Here is a summary of the applicability of the new rules:

SCSS: The amended rules of SCSS include a penalty of one percent of the deposit if the SCSS account is closed before the expiry of one year of the investment. Additionally, the scope of retirement benefits has been extended, and the definition of employee’s retirement benefits now includes government employees who died on the job.

PPF: The new rules for PPF state that on premature closure, interest in the account shall be allowed at a rate which shall be lower by one percent than the rate at which interest has been credited in the account from time to time since the date of opening of the account, or from the date of commencement of the current block period of five years, as the case may be.

The Department of Posts issued a circular on November 14, 2023, detailing the amendments made to SCSS and PPF.

FAQ

Q1: Who do the new SCSS and PPF rules apply to?

A1: The new rules apply to both existing account holders and new account holders.

Q2: What are the key changes in the SCSS rules?

A2: The key changes include a penalty for premature closure and an extension of the scope of retirement benefits.

Q3: What are the amendments made to the PPF rules?

A3: The amendments include changes to the interest rate on premature closure of the account.