Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Sanjeev

Sanjeev Govila  | Answer  |Ask -

Financial Planner - Answered on Jan 23, 2024

Colonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives, a financial planning company dedicated to the armed forces personnel and their families.
He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.... more
Surander Question by Surander on Jan 09, 2024Hindi
Listen
Money

Sir I have opened PPF account in 1998 and thereafter continuous depositing the money . As on 01.04.2023( After25 Years) my corpus was 10 Lacs ( 8.5 earlier and 1.5 lacs current one) . Now i need money becz of emergency . Please guide the penelity of 1% reduction will be from 01.04.2023 (Date of extension ) or since the date of opening the account . Its premature closure but after 25 Years

Ans: You will be allowed to withdraw 60% of the balance at the beginning of extended period (block of five years).
It means, let us say the account matured on 1st April 2023 and the available balance is Rs.8.5 Lakhs. Then, you are allowed to withdraw 60% of this Rs.8.5Lakhs during the block period of 5 years. This can be withdrawn either in a single withdrawal or in instalment each year. However, only one withdrawal is allowed in a financial year.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |7201 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 2024

Listen
Money
Sir I have opened PPF account in 1998 and thereafter continuous depositing the money . As on 01.04.2023( After25 Years) my corpus was 10 Lacs ( 8.5 earlier and 1.5 lacs current one) . Now i need money becz of emergency . Please guide the penelity of 1% reduction will be from 01.04.2023 (Date of extension ) or since the date of opening the account . Its premature closure but after 25 Years
Ans: The penalty for premature closure of a PPF account after 25 years is typically 1% reduction in the interest rate that would have been earned. This penalty is applied from the date of the extension, not from the date of opening the account.

Given your situation where you're facing an emergency and need to withdraw funds, it's important to understand that while PPF offers excellent tax benefits and compounding growth, it's also meant to be a long-term investment with a lock-in period of 15 years. Even after this period, partial withdrawals or loans are allowed under specific conditions, but the full withdrawal before maturity attracts the penalty.

In emergencies, it might be worth considering other available options before prematurely closing your PPF account, such as taking a loan against the PPF balance or exploring other liquid assets you might have. However, if you find that closing the PPF account is your only option, do factor in the penalty and tax implications to make an informed decision.

Always consult with a financial advisor or tax consultant to understand the implications fully and make the best choice for your situation.

..Read more

Latest Questions
Milind

Milind Vadjikar  |741 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Dec 03, 2024

Listen
Money
What happens when a Mutual Fund company shuts down / gets sold off?
Ans: Hello;

If a mutual fund company gets sold or fails, the process is prescribed by SEBI:

In case MF company is Sold,
The new fund house may:
1. Continue the scheme with a new name and management.

2. Merge the scheme with similar funds and offer investors the option to exit without any exit load.

In case MF company shuts down,
The fund house will:
1. Pay out investors based on the fund's last recorded Net Asset Value (NAV) and the number of units the investor holds, after deducting expenses.

2. If the company is not in a position to do so then SEBI may liquidate the funds assets and distribute the proceeds to unit holders.

It is also pertinent to note that mutual fund regulation in India is one of the most stringent and hence best, from investor's point of view, globally.

This is not just in theory. We have seen how the Franklin Templeton abrupt closure of debt funds was handled with surgical precision, by SEBI, with no loss to unitholders.


Skin in the game regulation mandates that 20% salary of key mutual fund personnel and fund managers is paid in terms of units of their funds with a 3 year lock-in.

The stocks and bonds purchased by the AMC for the fund are held by a custodian, appointed by the trust that administers the fund.

The trust engages into a investment management agreement with the AMC for managing the fund as per their mandate and within regulatory guidelines.

Registrar and Transfer Agents handle the investor registration,kyc, maintaining records, providing account and tax statements etc.

Happy Investing;
X: @mars_invest

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x