As per the new rules set in 2018, a person who became NRI can continue his/her PPF account that he/she had opened while in India. However, one cannot open a new PPF account after becoming an NRI.
Earlier to the above rule, (in terms of amended PF rule 2017), a person who becomes an NRI will need to close the PPF account the day he/she becomes an NRI. It also said that if the account holder chooses to continue the account, the rate of interest accrued will be reduced to the rate applicable to the Post Office Saving Account.
The government made amendments to this rule in 2018 and set out revised guidelines for existing PPF account holders who become NRI are as under.
- The account cannot be extend beyond maturity which is 15 years
- Interest earned is exempt from taxes.
- Interest rates will be reviewed by the Government of India every quarter and can be changed every quarter
To close the account, the PPF subscriber needs to submit the PPF withdrawal form, PPF passbook, photo identity card, and a canceled cheque from his/her NRO account to which he/she wants the PPF balance credited. It means these funds are non-repatriable and the subscriber cannot transfer the money abroad.
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