Update – PPF, SSY Deposit deadline extended and No penalty, revival fees for small saving scheme

Update – PPF, SSY Deposit deadline extended and No penalty, revival fees for small saving scheme (Last date, Extended till June 2020)

The trade and commerce sectors have been impacted by the lockdown. The small business owners and people working in the unorganized sectors have lost their employment. They are finding it rather challenging to make ends meet. The central and the state governments, along with the assistance of the law enforcement department, are working tirelessly to ensure that the needy people get access to essential commodities.

Impact on Small Savings Schemes

However, lack of employment means that a massive percentage of people in the country do not have access to cash. The employed people, small and marginal business owners and individuals, belonging to other categories, invest money in the small savings schemes. PPF, Sukanya Samriddhi Yojana and RD are such schemes.

As per the scheme guidelines, the account holders must deposit the money in the respective accounts by the end of a financial year. If the account holders fail to do this, then the savings scheme accounts can be deactivates. To activate these accounts, the individual must pay a specific fine.

A significant number of people will not be able to make these payments in the small saving schemes as they do not have access to liquid cash. The central government has taken a comprehensive step to ensure that the people get relief from this financial burden.

No Penalties for Missing Deposits

The Minister of Finance Department, Nirmala Sitharaman has highlighted some points during the official press meet. She said that the central government has decided that people, who deposit money in the small saving schemes like PPF, SSY and RD will not have to worry about the payment of the penalty, if they cannot pay the yearly deposits.

The minister also stated that the account holders will be able to make the payments till the end of June 2020. Earlier, the payment deadline was by the end of April 2020. Now the deadline has been extended to offer financial respite to the account holders.

The Finance Minister of India also pointed out that is the account holders desire, they can make the payment in a single installment. However, no account holder will be able to deposit more than Rs. 1.5 lakhs during the current financial year.

As per the guidelines, an account holder, who deposits money in the PPF account, needs to deposit at least Rs. 500. The minimum deposit amount for the holders of SSY account is Rs. 250. If an account holder fails to make the payment on time, he/she needs to pay an additional penalty amount of Rs. 50. The decision made the central government eliminates the penalty clause for the COVID – 19 pandemic. Additionally, the tax return accounting will be done on the invested amounts, made till June, 2020.

Announcement made of Indian Postal Department

The Department of Indian Post has also taken similar steps to ensure that their clients do not face financial constraints. Interested candidates can open SSY account in the post offices as well. The department had released an official statement that states that account holders can clear the due payments for 2019 – 2020 financial years and the monthly deposit for April 2020 on or before June 2020.

Non-payment of the monthly deposit or missing the penalty payments paves the path for the deactivation of the saving accounts. However, the guidelines have been changed to cope with these trying times.

Apart from the PPF and SSY accounts, make individuals open recurring deposit (RD) accounts in the post office. The post office charges Re.1 as a penalty for every Rs. 100, present in the RD account. If an account holder deposits Rs. 10,000 each month, then the post office will charge a penalty of Rs. 100, if case the person fails to make the payment.

The penalty will no longer be slapped on the deposit defaulters. It is important to remember that the clause will remain valid till the end of June 2020. The Finance Ministry and Department of Indian Post will evaluate the situation, and come with a new set of guidelines, to bring things back to normalcy.

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