The Public Provident Fund (PPF) is a savings-cum-tax-saving instrument in India, introduced by the National Savings Institute of the Ministry of Finance in 1968. The
PPF offers an attractive interest rate and returns that are fully exempt from tax, making it a popular investment choice.
But when it comes to the number of accounts one can hold, the rules are strict.
Can You Have Two PPF Accounts?
No, you can’t have two PPF accounts.
The PPF scheme allows only one account to be opened in the name of an individual.
Opening more than one account is against the rules and can lead to the second account being deemed irregular. This includes accounts opened at different banks or post offices.
Detection of Multiple Accounts
The detection of multiple PPF accounts by the government is facilitated through the use of the Permanent Account Number (PAN).
The PAN is a unique identifier assigned to all taxpayers in India, which helps prevent financial fraud and tracking of large transactions, including the opening of multiple accounts that could be used to evade taxes.
When you open the PPF account, you need to mention your PAN number. The system then can detect whether anyone has multiple accounts with the same PAN number.
Consequences of Multiple Accounts
If a person has opened more than one PPF account, the second and subsequent accounts are treated as irregular.
These accounts will be closed, and no interest will be paid on them.
The principal amount, however, will be returned to the account holder.
Conclusion
The PPF is a very valuable investment for those looking for safe and tax-efficient returns.
However, every one must follow the rules, particularly the requirement of having only one account.
Understanding such rules can help avoid any legal inconveniences and ensure that the benefits of the PPF scheme are fully realized by everyone.