PPF Discontinued Account Revival Calculator

Statutory Regulations: Reviving a Discontinued PPF Account under Scheme 2019

The Public Provident Fund (PPF) is one of India's most popular sovereign-guaranteed long-term savings schemes, offering 15-year statutory tenure, full Exempt-Exempt-Exempt (EEE) tax status, and complete immunity from attachment by court decrees under Section 14 of the Government Savings Promotion Act, 1873.

Under the statutory framework codified in the Public Provident Fund Scheme, 2019 (G.S.R. 915(E)), an account holder is legally obligated to deposit a minimum of ₹500 in every financial year. Failure to do so renders the account "discontinued" or inactive.

1. Statutory Revival Formula under Rule 13

Rule 13(1) of the PPF Scheme, 2019 establishes the precise statutory cost to regularize an inactive account:

• Default Fee: A statutory penalty fee of ₹50 for each financial year of default. This fee is credited to the Government of India and is not added to the account balance.
• Arrears of Minimum Deposit: A mandatory deposit of ₹500 for each financial year of default. This money is directly credited to your PPF capital balance.
• Current Financial Year Subscription: A minimum deposit of ₹500 (up to ₹1,50,000) for the current financial year in which the account is being revived.

2. Total Revival Outlay Formula

The total cash required to revive a discontinued account is expressed as:

Total Outlay = (Default Years × ₹50) + (Default Years × ₹500) + Current FY Deposit

For example, if an account has been inactive for 3 years and you deposit ₹5,000 for the current year:

• Penalty Fee: 3 × ₹50 = ₹150
• Arrears Deposit: 3 × ₹500 = ₹1,500
• Current FY Deposit: ₹5,000
• Total Payment: ₹6,650 (of which ₹6,500 earns interest and ₹150 is the penalty fee).

3. Does a Discontinued PPF Account Earn Interest?

Yes. Many depositors falsely believe that an inactive PPF account stops earning interest. Under official Ministry of Finance directives, the existing balance in a discontinued PPF account continues to accrue annual compound interest at the notified rate (currently 7.1% p.a.) until the statutory maturity date of 15 years.

4. Severe Consequences of Leaving PPF Discontinued

While the existing balance earns interest, leaving the account in discontinued status entails significant handicaps:

1. No Loan Facility: Rule 10 strictly bars loan sanctions against discontinued accounts.
2. No Partial Withdrawals: Rule 11 bars partial withdrawals from the 7th financial year onwards until the account is revived.
3. Loss of Extension Facility: An active PPF account can be extended indefinitely in 5-year blocks after 15 years. A discontinued account cannot be extended; it must be closed upon maturity, forcing liquidation of the tax-free vehicle.

5. Step-by-Step Revival Workflow at Bank or Post Office

To revive your PPF account:

1. Visit your home branch (e.g. SBI, PNB, Canara Bank, or Head Post Office) where the account is maintained.
2. Submit a written letter requesting revival of the discontinued PPF account with passbook details.
3. Fill out the deposit pay-in slip (or submit a single cheque) for the combined amount of default fees, arrears, and current year subscription.
4. The branch updates the account ledger, credits the arrears to your principal, and stamps your passbook as regularized.

6. Step-by-Step Numerical Case Study: Reviving a 4-Year Inactive Account

To illustrate the exact arithmetic performed at the bank counter under Rule 13 of the PPF Scheme, 2019:

• Account History: Opened in FY 2018-19. Regular contributions made until FY 2021-22. Defaulted during FY 2022-23, FY 2023-24, FY 2024-25, and FY 2025-26 (4 years of default).
• Accrued Existing Balance: ₹2,40,000 (continued earning 7.1% interest each year).
• Planned Revival Date: FY 2026-27 with a fresh annual deposit of ₹20,000.
• Statutory Breakdown:
  1. Default Penalty Fees: 4 years × ₹50 = ₹200 (Credited to Govt revenue).
  2. Minimum Subscription Arrears: 4 years × ₹500 = ₹2,000 (Credited to PPF principal).
  3. Current FY Deposit: ₹20,000 (Credited to PPF principal).
  4. Total Capital Added: ₹2,000 + ₹20,000 = ₹22,000 (well within ₹1,50,000 annual ceiling).
  5. Total Cash Required: ₹22,200.
  6. New Regularized Principal Balance: ₹2,62,000.
• Restoration of Privileges: Account is immediately eligible for loan against balance and partial withdrawals, and qualifies for 5-year extension upon completing 15 years.

7. Preserving 15-Year Maturity and Extension Eligibility

The 15-year maturity clock of a PPF account is calculated from the end of the financial year in which the initial deposit was made; it does not pause or reset during years of default. Reviving the account before maturity ensures that the depositor retains the priceless statutory option to extend the PPF account in 5-year blocks indefinitely with full tax-free compounding under Form 4 (H).