The Union Budget 2018 brought in a mix of sentiments for the Indian citizens. While it brought a lot of cheer for the farming and dairy sector, it made stock market invests grumpy. Finance Minister Arun Jaitley proposed changes in the way PPF is treated and functioned.
A change has been made in the Finance Bill regarding the PPF treatment. However, this is a provision of the bill and will be implemented if the Parliament approves it. The provision will repeal the Public Provident Fund Act, 1968. However, the important fact is that this bill will have no affect on the principal and interest earned on the PPF, it will remain Status Quo.
The government’s proposal is to include PPF act in government saving schemes just like 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, Post National Savings Certificates (VIII Issue) and Public Provident Fund Scheme, Savings Certificates, Kisan Vikas Patra and others. In short, the act will noe be covered under the Government Savings Banks Act, 1873.
The current government does not believing in implementing a change retrospectively, the act will be repealed from the date it is published in the official gazette.
“The deposits of investors in the PPF account before the commencement of the proposed amendment shall enjoy the current protection against attachment as is available. However, with respect to any deposits made by the investors in the PPF schemes after the proposed amendment is legislated, there seems to be currently no provision proposed for protection against attachment. There is no provision under the Government Savings Banks act 1873 with respect to protection from attachment against any decree as was available under the PPF Act,” said Suresh Surana, Founder, RSM Astute Consulting Group.
The only disadvantage which comes with this act is that earlier PPF account holders were enjoying the freedom from court attachment. However, if the bill is passed, it will pluck out the freedom from court attachment. In other words, passing the bill will be followed by the balance in PPF becoming subject to attachment under any order or decree of a court in respect of any debt or other liability incurred by him.
