Public Provident Fund (PPF)

PPF Scheme

Public Provident Fund (PPF) PPF


Public Provident Fund is one amongst the foremost standard saving schemes among Indian households. Since it’s managed by the Central Government, the money within the PPF account and also the returns it generates are secure. PPF, alongside alternative tiny saving schemes just like the senior voters Savings theme (SCSS), the Sukanya Samriddhi theme, and also the National Savings Certificate (NSC), was launched by the govt to profit tiny savers.

With a minimum investment of solely Rs five hundred per fiscal year, PPF could be a clear alternative for those searching for safe and secure returns. PPF additionally offers the simplest tax edges because it falls underneath the Exempt-Exempt-Exempt (EEE) class.

This implies that 1st, the money endowed in PPF associate exceedingly in a very} fiscal year gets exempted from an individual’s subject financial gain (Under Section 80C) for that year. Also, the interest earned on PPF deposits alongside the accumulated quantity doesn’t have any liabilities. The rate of interest for PPF is ready and paid by the govt for each quarter

. PPF rate of interest for the primary quarter of the year 2021-22 i.e. from first Apr to thirtieth Gregorian calendar month 2021 has been mounted at seven.1%. Key Options of PPF Lock-in amount: PPF could be a long investment with a lock-in period of fifteen years. This implies that the number accumulated in a very PPF account will be withdrawn solely at maturity that is fifteen years from gap the account. This tenure will be extended by five years at the top of the particular lock-in amount. Premature withdrawals are allowed however solely just in case of emergencies. Interest on PPF: Interest on PPF balance is calculated monthly and also the quantity is attributable to the PPF account at the top of each fiscal year.

The interest rates are pre-announced by the govt for every quarter. Each month, the interest quantity is calculated on rock bottom PPF balance within the account when the fifth of each month to the Doomsday of the month. Hence, PPF investors are suggested to form contributions to their PPF account before the fifth of every month. Minimum and most investment: people got to build a minimum investment of Rs. five hundred annually. A most investment of Rs. 1.5 100000 will be created in one fiscal year in a very PPF account.

Taxation: PPF comes underneath the Exempt-Exempt-Exempt (EEE) class of program which means that the principal quantity, the maturity quantity, in addition because the interest earned is exempt from taxes. Loan against PPF: A PPF account holder will take a loan against his PPF balance. However, the loan will be taken solely between the start of the third year and also the finish of the sixth year from the date of account gap.

The most loan quantity is restricted to twenty fifth of the PPF balance at the top of – the ordinal year or the year proceeding the year within which the loan is being applied.