The government relaxed the rules of three post office small savings schemes: Public Provident Fund (PPF), Senior Citizen’s Savings Scheme (SCSS), and National Savings Time Deposit (TD) scheme, through a notification dated 7 November 2023.
Changes in PPF
The government made changes in the interest calculation rules for the premature closure of the Public Provident Fund (PPF) account through the notification.
Previously, premature closure of the PPF account resulted in interest being allowed at a 1% rate lower than the interest rate credited to the account since its opening or extension. Under the new rule, the interest will be credited to the account at a 1% rate lower than the interest periodically credited since the beginning of the current five-year block period.
Changes in SCSS
The new rules provide changes in the Senior Citizen’s Savings Scheme (SCSS) account opening eligibility criteria.
As per the notification, a retired civilian employee above 55 years but below 60 years and retired defense employees above 50 years but below 60 years must open an SCSS account within three months from the receipt of the retirement benefits and proof of the disbursal date of such retirement benefits.
Previously, a retired civilian employee above 55 years but below 60 years and retired defense employees above 50 years but below 60 years should have opened an SCSS account within one month of receipt of retirement benefits.
Changes in National Savings TD
Previously, if an individual closed a 5-year Time Deposit (TD) account after four years from the account’s opening date, a rate admissible for a 3-year TD account would be applicable for the interest calculation.
As per the notification, if an individual closes a 5-year TD after four years from the account’s opening date, interest will be paid at the rate applicable to the post office savings account.
For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in
I am an Advocate by profession. I interpret laws and put them in simple words. I love to explore and try new things in life.
