How to reactivate a PPF account

A Public Provident Fund (PPF) account allows individuals to invest up to Rs 1.5 lakh each year and also provides a tax deduction under Section 80C of the Income Tax Act. The account has a validity of 15 years and the account holder is supposed to deposit a minimum of Rs 500 every financial year.

Failure to deposit this amount leads to the account being designated as inactive. One can reactivate the account by following the below mentioned procedure.

• Written application

For the revival of an inactive PPF account, the account holder needs to make a written request to the bank or the post office branch where the account is located. The application can be made any time during the 15 year period of the account.

• Deposit

The investor will be required to deposit a minimum of Rs 500 for each financial year of the period when the account was inactive. The cheque needs to be submitted to the branch along with the application.

• Penalty

To revive the account, the bank or post office charges a penalty of Rs 50 for each financial year in which the account was in an inactive state. The penalty needs to be deposited along with the payment of arrears.

• Process

Once the application is submitted, the bank or post office scrutinises the application with their records. If the period of deposit (15 years) has elapsed, the account can't be revived. However, one can access the maturity proceeds by paying the penalty.

Point to note

• The amount in a PPF account continues to earn interest even while it is inactive.
• One cannot avail a loan against an inactive PPF account.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)