The latest PPF, SCSS and Post Office Term Deposit Amendment Rules 2023

The latest PPF, SCSS and Post Office Term Deposit Amendment Rules 2023 were introduced on 7th November 2023. Few rules are investor-friendly and few are harsh.The government notified these changes on 7th November 2023. As I mentioned above, few rules with respect to PPF and SCSS look investor-friendly. However, the new rules with respect to a 5-year term deposit look too harsh. Let us see all these changes in detail.

PPF or Public Provident Fund (Amendment) Scheme, 2023

Let me explain to you at first the existing rules of PPF premature withdrawal rules (I wrote an article on this “Premature Closure Of PPF Account – New Rules 2016“).

You are allowed for premature closure of your account or for the account where you are a guardian for minors or a person of unsound mind by submitting Form-5. You are allowed for premature closure only for the below reasons.

• (a) Treatment for a life-threatening disease of the account holder, his spouse or dependent children or parents, on the production of supporting documents and medical reports confirming such disease from the treating medical authority.
• (b) Higher education of the account holder, or dependent children on the production of documents and fee bills in confirmation of admission in a recognized institute of higher education in India or abroad.
• (c) If your residential status changes, then you are allowed for premature closure on the production of the copy of your Passport and visa or Income-tax return.

Along with that, please note the below points to understand more about the premature close of PPF account rules.

The old rules can be tabulated with the below example.

What has changed NOW?

The earlier sentence was “Provided further that on such premature closure, interest in the account shall be allowed at a rate which shall be lower by one percent. than the rate at which interest has been credited in the account from time to time since the date of opening of the account, or the date of extension of the account, as the case may be“.

The new sentence will be
“Provided further that on such premature closure, interest in the account shall be allowed at a rate which shall be lower by one percent. than the rate at which interest has been credited in the account from time to time since the date of opening of the account, or from the date of commencement of the current block period of five years“.

Senior Citizen’s Savings (Fourth Amendment) Scheme, 2023

In terms of SCSS, there are few changes in rules introduced and I will share the same one by one.

You can extend SCSS as long as you WISH!!

Earlier the extension for SCSS was allowed only once. Now you can extend the SCSS after the completion of 5 years as many times as you wish for in the block of 3 years. This is really a good move for senior citizens.

Penalty and liquidity for premature withdrawal during extended SCSSEarlier during the extended SCSS period, you are allowed to withdraw the amount after one year without any penalty. However, now you are allowed to withdraw before one year.

However, you have to pay a 1% penalty on the deposited amount.

Relaxation to open the account for those whose age is 55 years to 60 years and who received retirement benefits

The current rule is as below.

An individual who attained the age of 55 years or more but less than 60 years of age and has retired on superannuation or under a voluntary or special voluntary scheme. But they can open this account only on the condition

That the account is opened within THREE MONTHS of receipt of retirement benefits and the amount should not exceed the amount of retirement benefit.

The spouse of a Government employee can open the SCSS account

The current rule is as below.

The spouse of the government employee shall be allowed to open an account under this Scheme, if the government employee who has attained the age of fifty years and has died in harness, subject to the fulfillment of other specified conditions.