Firstly, PPF, NSC and SSY are post office investments abbreviated as Public Provident Fund, National Savings Certificate and Sukanya Samriddhi Yojana. These are risk-free government-backed investment schemes with distinct benefits. Along with high rate of interest and tax benefits, these schemes carry the sovereign guarantee of Indian Government.
First as part of KYC relaxation. people will be allowed to invest in small savings schemes by using Aadhaar, instead of the PAN cards. In india many people own Aadhaar cards than the PAN cards only a small amount of semi urban and urban population have PAN cards. So to encourage the Rural population to invest in these schemes. Finance ministry had declared that the rules for verifying the identity or KYC norms for small savings schemes will be the same as those required for opening Jan Dhan accounts.
The second procedural change is the simplification of the process related to the claim of investment money in the case of an investor's death. Till now in most of the cases due to the complexity of the claim process. The money of the deceived is not received by the heirs. So from now with this new change if there are no issues legal heirs can lay their hands on the deposits of the deceased.
Third procedural change is simplification of the nomination process to attract more investors to invest in the Small Savings Scheme. So that this will potentially boost the inflows into the National Small Savings Fund (NSSF). And the Union government also plans to take Rs 4.71 lakh crore from the NSSF (National Small Savings Fund) in the financial year 2024 (which starts from April 1, 2023, and ends on March 31, 2024). This is an increase from the revised estimate of Rs 4.39 lakh crore that it plans to take in the current financial year 2023 (which ends on March 31, 2023).
PPF is One of the most well-liked investment options with exempt-exempt-exempt (EEE) tax status. It has a 15-year lock-in term, but after the seventh year, partial withdrawals are permitted. The loan facility officially starts in the third year. The regulations allow for a minimum annual contribution of Rs. 500 and a maximum contribution of Rs. 1.5 lakh. On all accounts, whether they are maintained in their own name or on behalf of a minor, the maximum of Rs 1.5 lakh is applicable.
National Savings Certificates (NSC) is an investment plan where one can invest individually, jointly, or on behalf of a minor. This is an investment plan with a five year lock in. This plan is also eligible for an income tax deduction in accordance with Section 80C of the Income Tax Act. In this plan, Interest is reinvested rather than paid in this case. Furthermore, the reinvested interest is tax deductible under Section 80C. (except for in the 5th year). A minimum of Rs. 1,000, in multiples of Rs. 100, should be invested. There is no upper limit and the account will mature five years after the deposit date. An NSC investor may also obtain loan financing by securing a bank pledge of their investment.
Sukanya Samriddhi is a programme with exempt-exempt-exempt (EEE) tax status that is part of the "Beti Bachao Beti Padhao" initiative. This results in tax exemption for the investment amount, interest earned, and maturity amount. Parents or legal guardians may open a maximum of two accounts, but only one account may be opened in the name of each girl child. But a penalty will be applied if the minimum amount required is not deposited in a single financial year.
Apart from this In addition, the government will decide on the interest rate for small savings plans for the quarter ending in March. As interest rates on this Schemes are announced once in every three months by the government and as It has not changed for a long time. Now after increasing the interest rate on behalf of EPFO, the interest on small savings schemes is expected to increase.
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