People are worried about the status of Public Provident Fund (PPF), after the announcement made by Finance Minister during Budget 2018 regarding repeal The Public Provident Fund Act, 1968 under Finance Bill, 2018. After the announcement there is a common fear among people whether PPF will be discontinued or what will be the safety of money deposited in PPF ?
In Finance Bill 2018-19, a provision has been made to repeal the Public Provident Fund Act, 1968. As a result, all small savings schemes including PPF will now be covered under the Government Savings Banks Act, 1873.
The schemes include Post Office Savings Account, National Savings Monthly Income (Account), National Savings Recurring Deposit, Sukanya Samridhhi Account, National Savings Time Deposit (1 year, 2 years, 3 years and 5 years, Senior Citizens’ Savings Scheme, Savings Certificates, Kisan Vikas Patra , National Savings Certificates (VIII Issue) and Public Provident Fund Scheme.
The Finance Bill 2018 says about Public Provident Funds (PPF)
Further, Finance bill makes it clear that the ongoing structure of the schemes will not change if the PPF Act is repealed.
What is the Fear ?
What is the biggest fear of the repealing the Public Provident Fund (PPF) ? Many experts say a big drawback of the repeal would be that a subscriber’s deposits in PPF account would be subjected to attachment by a court of law in case he was under any debt or liability which he could not repay otherwise.
Further, Bill said that the repeal shall not judicially affect the interest of depositors who made deposits or were issued certificates or made contribution to any scheme under the repealed enactments before the commencement of the Finance Act, 2018, the bill said.
The Government Savings Banks Act, 1873 does not provide any such protection. The Public Provident Act of 1968 provides the protection on PPF investment from court decree & attachment order.
Inputs from ET
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