PPF to be protected from attachment, says governmentThe Union Budget 2018 had proposed to repeal the Public Provident Fund Act, 1968 and with it, the protection against attachment of the PPF account. The attachment enables banks or the Income Tax department to seize the assets of an account holder to settle their claims. We wrote about it here.

However, in response to apprehensions among the public about the safety of their PPF accounts, the government has clarified that it will be enacting a new law called the Government Savings Promotion Act which will retain the protection against attachment for the PPF.

This was clarified by Economic Affairs Secretary, SC Garg in a tweet which says, “Public Provident Fund (PPF) Deposits enjoy protection from being attached. All existing protections have been saved while consolidating PPF Act under proposed Government Savings Promotion Act. Existing and new PPF deposits would continue to have this protection.”

However, savers should note that until the new law is passed, the PPF will be governed by the Government Savings Act, 1873 which does not carry any protection against attachment.

The new Act is also likely to have the following features, the Economic Times reports:

  1. More flexible withdrawals from government schemes such as for medical emergencies
  2. Allowing guardians to deposit funds for minor
  3. Allowing minors to nominate heirs
Author
Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at neil@rupeeiq.com.