The Public Provident Fund Act, 1968

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The Public Provident Fund Act has been incorporated on 21st July 1968. This Act has been established for the institution of Provident Fund for the general Public.  The Public Provident Fund is nothing but a savings and tax saving mechanism in India. This is due to influence small savings by an Investment with rational returns and with income tax benefits.

The Central Government by notifications in the Official Gazette has introduced such scheme for the general public well known as Public Provident Fund Scheme. This Scheme shall be applicable and effected unless there is any bar by any of the law in force. The Central Government shall amend or modify the scheme at any time with the notification in the Official Gazette.

Any person, who acts as a guardian on behalf of a minor or insane or unsound, etc, shall collect this provident fund with in the maximum and minimum limit as prescribed in this scheme. In case of any subscription made for such fund shall be paid interest by the Central Government as notified in the Official Gazette. Interest shall be paid as calculated as that is specified in the provident fund scheme.

The subscribers are allowed to withdraw any amount including interest therein to the extent specified in the Scheme. Such withdrawal shall be only after five years at the end of his first subscription. The subscriber shall withdraw the entire amount only after fifteen years from the end of his initial subscription of fund. In case withdrawal of fund on behalf of the minor shall withdraw any amount only for the usage of the minor. The subscriber shall receive loan to such amount that they maintain in their account and in case on behalf of the minor, loan shall be granted in favour of his or her guardian for the usage only for the minor as prescribed and specified in this provident fund scheme.

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In case if the subscriber dies, the fund that is credited to his account shall be given to his nominee if any at the time of death. In case if the subscriber who dies is a minor, his guardian will receive the entire fund amount or guardian appointed by the Court of Law shall receive or to any other guardian to the minor shall hold the entire fund amounts. In case of no nominations available during the subscriber’s death, then his legal heirs shall receive such fund. This subscriber’s fund shall not be used for paying any debt or liabilities nor attached with any Decree or Order in respect of the liabilities or any other debts.

There should not be any legal proceedings against such an action taken in pursuance to this Act in good faith. It means no suits or prosecution lies against any person for action in favour of this scheme. The Central Government while introducing new provisions shall have to frame as though it should not affect any other law in force and should be notified in the Official Gazette. Not only this has the Central Government had to take the assent from the Houses of Parliament before introducing such Laws or provisions that too before the Parliamentary Sessions ends. In case of any modifications or amendments in the framework of the provisions or any laws, the Central Government should make it before this Sessions end and should take the assent from the Houses of Parliament and assented by the President of India through his or her signature.

This Act really has many good provisions that really help the person who are under the purview of this Act. This provident fund account shall be opened by any person including in the name of a minor with a meager amount in Post Offices and in any nationalized Banks. They influence in small scale investments and tax concessions under Section 80C of the Income Tax Act with small and optimal returns with interest.

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by C.Srivenkatesh Prabhu.