I’ve a nationwide financial savings certificates (NSC) account and a public provident fund (PPF) account, which was opened a very long time in the past. Since I plan to go overseas on a piece visa for round three years, can I proceed to contribute to the PPF and NSC accounts? Do I’ve to tell the publish workplace about this? Additionally, can non-resident Indians (NRIs) put money into NSCs?
— Title withheld on request
As per the federal government Financial savings Promotion Basic Guidelines, 2018 learn with Public Provident Fund Scheme, 2019 and Nationwide Financial savings Certificates (VIII Problem) Scheme, 2019, if the account holder subsequently turns into an NRI through the interval the account is in operation, the account could also be continued until its maturity on the non-repatriation foundation (i.e., the quantity can’t be remitted outdoors India). Additional, the account won’t be allowed to be prolonged or continued past maturity.
For the PPF account, the account holder is allowed untimely closure of the PPF Account (with 1% penal discount of rate of interest) on change of residential standing of the account holder on manufacturing of the copy of passport and visa or income-tax return (ITR). Such pre-mature closure won’t be allowed earlier than 5 years from the tip of the yr by which the account was opened.
Subsequently, you’ve the choice to proceed contributing to your PPF account until maturity otherwise you even have the choice to prematurely shut the PPF account in case you have been contributing for a interval of over 5 years. The full funding allowed beneath the PPF account is ₹1,50,000 per monetary yr.
Whereas the curiosity revenue from a PPF account is exempt from income-tax, curiosity revenue from the NSC account is taxable. Nevertheless, curiosity revenue accrued from the NSC account is eligible for deduction beneath Part 80C as a qualifying reinvestment topic to a ceiling restrict of ₹1,50,000 per monetary yr clubbed with all different qualifying investments.
Sonu Iyer is tax accomplice and folks advisory companies chief, EY India.