Non-resident Indians (NRIs) who have invested in the Public Provident Fund (PPF) may have got temporary relief for now.
A few months ago in October, the Department of Economic Affairs (DEA) had said that if a resident, who opened an account under this scheme, and subsequently becomes a non-resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes a non-resident.
Now, the DEA has released an office memo on February 23, 2018, keeping its earlier notification regarding the NRI’s PPF account released on October 2, 2017, in abeyance (or temporarily dismissed).
An NRI cannot invest in PPF, however, if one’s residential status subsequently changed to NRI, the account was allowed to be run till maturity. PPF is a 15-year scheme, which can be extended indefinitely in blocks of five years. However, for a resident turned NRI, the extension was not ..
According to the 2017 notification issued by the government,PPF (and even National Savings Certificate or NSC) held by an NRI would be treated as “deemed to be closed with effect from the day he becomes a non-resident” and would keep earning interest rate of a post office savings account. The recent notification is silent on NSC but makes it clear that the earlier diktat has been kept in abeyance till further notice for PPF account held by NRIs.