Non-resident Indians are not allowed to open new PPF accounts in India due to government regulations, according to reports from Mint. However, NRIs who already had PPF accounts before becoming NRIs can continue making fresh contributions through their Non-Resident Ordinary (NRO) account until maturity, provided their nationality remains Indian. The upper investment limit for PPF accounts is ₹1.5 lakh per financial year, while the minimum annual deposit requirement is ₹500. Once NRIs reach the 15-year term, they must close their accounts, and if left open, no further benefits will follow.
NRIs cannot extend their PPF accounts in 5-year blocks after maturity, unlike Indian residents who can, as reported by Mint. The 15-year lock-in period cannot be extended for NRIs. According to RBI guidelines, NRIs can get proceeds credited to an NRO or resident account and continue investing through their NRO Account, but the invested amount and interest can be withdrawn and repatriated only upon completion of 15 years. Premature closure is allowed after five financial years from the last day of the financial year in which PPF is opened, with funds transferred to NRO account and interest credited 1% lower than the regular rate.
The interest earning on PPF investments is non-taxable as it falls under Section 10(11) of the Income-tax Act, according to Mint reports. However, tax treatment can vary in an NRI's country of residence. PPF withdrawal before maturity is permitted only for specific purposes, with premature closure allowed after completion of five financial years. Since proceeds after PPF maturity are accounted as capital income, its repatriation is limited to a maximum of $1 million per year.
