Investors of popular small savings schemes such as the Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), and Post office deposits face a critical deadline. They must ensure their Aadhaar number is submitted to their respective post office or bank branch by the end of this month. Failure to meet this crucial deadline could result in the freezing of their small savings investments.
The imperative need for both PAN and Aadhaar numbers has been instated for investing in small savings schemes like PPF, SSY, Senior Citizens Saving Scheme (SCSS), among others. The Ministry of Finance instituted this requirement through a notification issued on 31 March 2023.
As stipulated in the Finance Ministry's notification, small savings scheme subscribers must furnish their Aadhaar numbers by 30 September 2023, if they did not provide this information during the initial account setup for PPF, SSY, NSC, SCSS, or any other small savings account. In the absence of Aadhaar seeding, small savings accounts will get froxen six months after the account's opening. For existing subscribers, their accounts will meet the same fate starting from 1 October 2023, if they fail to adhere to the Aadhaar submission deadline.
Small savings schemes, highly regarded for their low volatility and government backing, serve as valuable investment avenues for individuals looking to accumulate wealth. Many of these schemes offer tax benefits, with some like the SCSS and PPF qualifying for deductions under Section 80C of the Income Tax Act, amounting to Rs1.5 Lakhs.
These schemes' interest rates undergo periodic reviews, with a notable 30 basis points (bps) increase announced for the July-September 2023 quarter. This revision specifically targeted 1-year and 2-year term deposits, along with 5-year recurring deposits, providing small savings scheme investors with more lucrative returns.
To ensure the continuity of their small savings investments, investors are urged to promptly fulfill the Aadhaar submission requirement, safeguarding their financial future and tax benefits.