Aug 102016

All About PPF Form D (Loan Application Form)

PPF – the most popular small investment option available in market – is one of the very few financial investment vehicles where security of invested money is at its best. Why so? That is because the Public Provident Fund or the PPF is a government-back investment vehicle. No matter what, the chances of this investment being lost are same as the probability of the entire Indian economy going for a toss and entering the realms of irrecoverable depression.

How often do you see that happening? Not frequently! The last time this happened was in 1930 when the whole of world economy slipped into Great Depression. The 2008 depression that plagued America and some of the European nations did not manage to find a hole in Indian economy, which continued to grow at a steady rate.

Therefore, PPF is by far one of the most secure investment options you will come across. This benefit is not the sole benefit that PPF has to offer. There are a number of other benefits, which make PPF a very rewarding investment area. Let us take a quick look at some of the benefits that PPF account holders enjoy.

Benefit 1: You can enjoy loans

Once your PPF account attains the age of 3, you can apply for loan. You can continue applying for loans until the account reaches its 6th birthday. However, you need to remember that you can apply for loan for the second time or every subsequent time only if you have repaid the previous loan in full. Else, your loan application will be rejected.

Benefit 2: Loans are available at lowest interest rates

Can you ever find a bank or a financial company that offers loan at a rate of 2% yearly interest? Well, that is simply not possible! However, this is what you get when you take out a loan against your PPF account. Isn’t that incredibly low rate of interest?

Benefit 3: You can enjoy partial withdrawal of funds

You may say, ‘hey, this feature is available with other investment products too’! Of course you are right and PPF offers the same too. Once the account hits its 7th birthday, you can apply for partial withdrawal of funds from the account. This can help to accommodate sudden financial crunches one can face at times.

Benefit 4: You get to save taxes

You know what? We call the income tax department a devil. It always eyes for taxing our hard-earned money. PPF account helps you to save a good amount of money that would otherwise be lost in form of tax on already earned money. Moreover, it also helps you to evade taxes on new income in form of interest earnings. What does that mean? Allow us to give an explanation. PPF account investments up to 1.5 lakhs per year will not be taxed. Also, a PPF account earns interest rates on the money present in the account. This is your income. However, this income is not taxed by the IT department.

Benefit 5: No one touches your PPF investments except you and the government

This is one really great thing about a PPF account. Not even a court can mandate to liquidate your PPF account. But hey… wait! Where is this court mandate coming from? Look, it may happen that one day you take out a loan from a bank and then you fail to pay it back. The bank will try every means to recover the loan money from you. The final resort is to send a legal notice and take shelter of a court. That is when a bank can pass a mandate, authorizing the bank to liquid all your financial accounts and recover the money. Even if, unfortunately, such a scenario occurs, the court will not have the authority to authorize the bank to touch your PPF account. It will remain safe even if all other financial accounts are liquidated. Only and only the government is the third party which has the authority to touch your PPF account. The government will however do so under very special circumstances like – collecting unpaid taxes. Apart from special scenarios, even the government will not touch your PPF account. Isn’t that amazing?

Well, now that we have gone through various benefits of having a PPF account, let us turn our attention to the Form D that is associated with PPF account. So, what is Form D? Let us find out in details in the section below:

All About PPF Form D (Loan Application Form)

Remember one of the benefits of taking out loans against your PPF account? Well, you just cannot walk up to a bank or a post office where your PPF account is located and declare that you need a loan against your PPF account. You need to follow the proper documentation process and apply for a loan. The application form that you need to use is known as Form D. Without filling up this form, you cannot get a loan and even your loan application without a properly filled Form D will not be acceptable.

Now that we know the purpose of Form D, let us take a look at the different elements of the form and find out precisely what you can expect from this form.

You can get SBI PPF Form D from this link.

Elements of Form D Necessary Explanation Additional Explanation (if required)
Subscriber’s Usage Area (basically declarations) Sub section 1: The subscriber needs to declare how much loan he or she wishes to take against his or her PPF account. The account Number has to be properly mentioned too. NA
Sub section 2: The subscriber needs to declare the amount of loan he or she had previously taken against the account and the date on which the loan was repaid in full. Also, the total amount repaid along with interest is to be clearly mentioned in this sub section. Remember that a person taking out a loan against a PPF account has to repay the entire loan along with interest within 3 years from the date on which the loan was disbursed.
Sub section 3: This is where the subscriber needs to declare that in case the loan is taken against a PPF account on name of a minor (who is alive and is still minor), the loan money will be used only and only for that minor. NA
Sub section 4: Just a statement stating that the PPF account passbook is attached with the application. The subscriber has to provide the passbook along with the application form. NA
Official Usage Area (Office can be a bank or a post office) First item on list: This is where the date on which the PPF account was opened will be mentioned. NA
Second item on list: This is where the total balance in the PPF account will be mentioned. NA
Third item on list: This where the loan amount that can be approved will be mentioned. NA
Fourth item on list: This is where the total loan that is actually sanctioned will be mentioned. NA
Finally, the date and signature of the service manager will be given. NA
Declaration by subscriber This is where the subscriber and the bank/post office will work together. It will mention the loan amount that has been sanctioned along with the PPF account number. NA
A revenue stamp has to be attached in the specified area. NA
Date and thumb impression or signature of the subscriber will be required in specified fields. NA

That is pretty much everything that you need to know about PPF Form D. In case you have any other concerns or questions, feel free to drop a comment and send your query to us. We will try to revert back as soon as possible.

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