After attaining the superannuation age of 58 years, I retired in December 1996. My wife and I are planning to leave India permanently, to join our daughter in Canada. Please guide me on the following points:

* My Public Provident Fund (PPF) account was started in March 1990. Can I close it now, since I am going to be a non-resident Indian?

* What about my National Savings Scheme account?

* As regards LIC policies, how do I continue to pay the premiums?

* I also have Indira Vikas Patras, NSCs and investments in UTI, MFs and Co-FDs.

Can I take any part of it to Canada since I have no relative here?

--Keki M Patel, Mumbai

You will have to inform your bankers just prior to leaving India, to designate your savings bank account as a Non-Resident Ordinary (NRO) account.

It would be advisable to give power of attorney to any one of your close friends (as you have no relatives) to operate the account or insert his name as a joint account holder. The maturity proceeds of IVPs, NSCs, etc, can be credited freely to your NRO account by your friend. Withdrawals can be effected from this account for local disbursements, investments in UTI units, some of the MF schemes, government securities, etc.

The PPF account will have to be run until its maturity, by contributing a minimum amount of Rs 100 per year. If your Indian income crosses the basic exemption limit of Rs 40,000 and exemption u/s 80L of Rs 15,000, you are free to contribute to the PPF account out of your income chargeable to tax.

On the other hand, if your Indian income is not likely to come into the tax net, even in the distant future, you need not contribute even the Rs 100 that is otherwise required to keep the account alive.

However, I strongly recommend that you contribute Rs 100 every year, since in that case, you will be entitled to make partial withdrawals and earn higher after-tax interest from other sources instead of the 12 per cent tax-free interest you earn from the PPF.

You should take advantage of PPF's partial withdrawal facility and transfer as much as possible every year to UTI schemes and MFs. In your case, the first withdrawal can be made on April 1, 1996, and thereafter, one withdrawal will be allowed every year.

I don't think you need life cover any longer and, therefore, there's no need for you to bear its cost. Even if you do need the cover, the payment made by LIC on your demise to your wife is not repatriable and, therefore, it is useless to her if she continues to stay in Canada.

Since your Indian income will have gone down substantially, you will be in a good position to withdraw from your NSS account. If the total income, inclusive of NSS withdrawals, is less than the minimum chargeable to tax, there will be no problem. If, however, the income crosses this level, you may use your PPF account to bring the tax liability down to nil. No tax will be deducted at source in case you fill Form 15-I in duplicate, informing the post office that the income-tax payable is nil. If you do so, it will be necessary to ensure that the income tax is really nil.

Unfortunately, you will have to be dependent on your daughter, in spite of having a sizeable amount in India. Since you have no relatives in India, you are not in a position to give them gifts.

Luckily, the rupee is slated to become fully convertible in a short while. Otherwise, you would have been forced to bequeath all your assets to charity after your demise. You should draft a will and bequeath your estate to your wife and, if she predeceases you, to your non-resident daughter. In future, the rules may change and she may be allowed to repatriate the funds abroad. Even otherwise, your daughter will be able to enjoy the benefit of these funds when she comes to India on vacation.

After the maturity of my PPF account, I've opted for an extension for a block period of five years. In the event of my death, the amount standing to the credit of the account is repaid on demand, to my nominee or successor. Does the nominee or successor continue to have the right to withdraw in installments?

--R N Tiwary, Ranchi

It's more profitable to close the old account and open a new one as the partial withdrawal facility in the extended period is not as beneficial as it is, prior to the maturity date. However, I agree with you that some account holders may like their nominees to enjoy this facility. One of my knowledgeable readers, R G Chandorkar, has made some very valuable suggestions to the Department of Small Savings on this important issue. The following is an extract from his letter:

``The PPF scheme has been excellently serving its dual objective of resource mobilisation for the exchequer and simultaneously providing an excellent and safe parking space for the hard-earned funds of the taxpayers. Safety is the most important aspect to protect the wife from the vagaries of life after the death of the account holder.

``After the demise of the account holder, the nominee (mostly the wife) suddenly faces a serious problem. Yes, she is allowed to continue the account without losing any interest, but whenever she decides to withdraw, she must withdraw the entire amount.

``Unfortunately, partial withdrawals by the nominee are not permitted. This is strange. The government would like to hold on to these large funds and the widow would like to continue the account without loss of the partial withdrawal facility. But the PPF rules stipulate-All or None. I strongly feel that these rules should be suitably modified. An extra special facility of monthly withdrawals may be allowed if the nominee is a widow. This will provide social security of the highest order.''

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