The Ultimate Guide to Public Provident Fund (PPF)
Public Provident Fund (PPF) is one of the most popular savings options in India. It offers a secure investment avenue backed by the government, attractive interest rates, and tax benefits. With a tenure of 15 years, a PPF account allows individuals to make deposits and earn interest for a total duration of 15 years from the date of opening. It has a mandatory lock-in period of 15 years, during which funds deposited cannot be withdrawn.
Key Features of PPF:
- Deposit amounts ranging from Rs 500 to Rs 1.5 lakh per financial year.
- Interest rate of 7.1% per annum, compounded yearly.
- Extension of account in blocks of 5 years after maturity.
- Tax benefits under Section 80C and Section 10 of the Income Tax Act.
Importance of Timely Deposits:
Interest on PPF is calculated monthly based on the lower balance between the 5th and last day of each month. Making contributions by the 5th of each month maximizes returns, as interest is credited annually.
Eligibility and Taxation:
PPF accounts cannot be opened by HUFs, trusts, or NRIs. However, NRIs can continue contributions on a non-repatriation basis if they become NRI during the maturity period. PPF falls under the EEE category, offering tax-free deposits, interest earnings, and maturity proceeds.
PPF is a secure and reliable investment option for conservative investors looking for long-term savings with tax benefits. Consider opening a PPF account today to secure your financial future!
