PPF account for NRI

Investment in Existing PPF Account After Becoming an NRI

Online Legal India LogoBy Online Legal India Published On 15 Feb 2023 Category EPF

The Public Provident Fund Scheme, 1968, does not permit Non-Resident Indians (NRIs) to open an account. NRIs who invested in the PPF prior to their non-residency during the account's maturity term may still contribute to the Fund until its maturity on a non-repatriation basis. Funds in such accounts are held non-repatriation, meaning they cannot be exchanged for foreign currencies or returned to the NRI's country of residence.

Before the account matures, PPF subscribers who change their status to Non-Resident of India can still make subscription payments to the Fund. After 15 full financial years have passed since the end of the year the PPF account was opened, the account matures.

When changing citizenship or residency, the PPF subscriber must notify the bank or post office within a month (whichever is applicable).

Investment in Existing PPF Account After Becoming an NRI

The government has given permission for PPF account investments up until maturity. An NRI is not allowed to deposit additional contributions after the account reaches maturity. "If a resident continues to subscribe to the Fund until its maturity on a Non-Repatriation Basis during the currency of the maturity period prescribed under Public Provident Fund Scheme," it says.

PPF Withdrawal or Account Closure by NRI

The exact process must be followed for an NRI withdrawal of a PPF. They don't have any exceptions or restrictions. Form and procedure are both the same. The PPF corpus is available in your NRO account. This sum would not be subject to tax in India. However, your home nation may impose taxes on this.

After the PPF corpus reaches maturity, you must go to the base branch of your PPF account to withdraw it. Submit your passbook and the PPF withdrawal form. You must provide the account number to have the money credited to your NRO account. A picture of the PPF withdrawal form is available.

Limitations of PPF Account For NRI

For NRIs, the PPF account is different. For them, the rules are different. There are a few restrictions.

After a PPF account matures, non-resident Indians cannot continue to make investments in it. The NRI can continue to contribute to their PPF account without doing so. However, regular Indian citizens can prolong their PPF accounts by making a new contribution.

An NRI must make PPF account contributions using an NRE, NRO, or FCNR Account.

An NRI has the same ability to withdraw money in part from the PPF account as a regular Indian resident. However, the sum cannot be returned home. The NRI is only required to use this money in India. The NRI can repatriate the maturity funds via the NRO account. In accordance with the Liberalized Remittance Scheme, the RBI enables repatriation abroad (LRS).

Steps to Close PPF account [For NRI]

A PPF account must be closed in person at the Indian bank branch by an NRI. They must bring the PPF withdrawal form, a copy of their ID, their passbook, and a voided check to the branch. So, if they are in India, they can go straight to the bank and finish the procedures. The amount would be deposited into the person's NRO Account.

If they cannot return to India, a representative may visit the branch in their place. They must provide the representative with the authorisation letter in order to do that. These are the steps.

  • Fill out the PPF withdrawal form after downloading it.
  • Include your ID, address, and a cancelled check from your NRO account as evidence of ownership.
  • If you cannot go to the bank in person to submit the paperwork, write a permission letter stating that your representative will go there instead.
  • Send your agent in India all of this paperwork.
  • Your representative must go to the bank where your NRO account is located. He needs to have the bank manager attest to your papers.
  • For PPF withdrawal, the representative would go to the bank branch and produce all the paperwork.
  • The money will be credited to your NRO Account after the bank processes the application.

About PPF Account for NRI

By providing an investment with respectable returns and income tax advantages, the Public Provident Fund serves as a saves-cum-tax-saving tool to mobilise small savings. The Government of India completely guarantees the programme. Any court ruling or decree prohibiting the attachment of funds in a PPF account is void. However, the account may be attached by Income Tax and other governmental agencies in order to collect unpaid taxes.

It is forbidden for non-resident Indians to open or manage a PPF account in India. It is true that a PPF account will stay active if it is opened by an Indian citizen who later becomes an NRI.

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Anjali Malhotra


Anjali Malhotra