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Public Provident Fund (PPF): Benefits, Interest Rates, Taxability & Exemption, Partial withdrawal & Loan Facility

Tooba Maher
Tooba Maher
Public Provident Fund
Public Provident Fund

Public Provident Fund (PPF): We all are concerned about our savings so as to have a secured and happy future. However, in today's crucial time, people are not properly aware that where they should invest to get good returns. So, make wise choices during your earning days and have a tension free life after retirement. Investing in the government scheme of Public Provident Fund (PPF) you can earn lakhs of profits by only investing 100 rupees.

What are the benefits of Public Provident Fund (PPF):

  1. Public Provident Fund offers high-interest rates

  2. It is loaded with tax benefits, tax-exemption and security to capital.

  3. Interestingly, the interest earned & returns are not taxable under the Income Tax.

  4. By investing Rs 100 in this government scheme, you can earn around Rs 54.47 lakh.

  5. By investing money in PPF scheme, you can save tax of up to Rs 1.5 lakh every year.

Is Public Provident Fund a good investment?

Yes, PPF is a very good option for people, who are risk-averse & are looking for long term investment.
PPF provides fixed returns and the rate of interest is at around 7.1%.

What is the duration of public provident fund?

  • The duration of public provident fund is 15 years.

  • It is to be noted that the minimum duration of a PPF account is 15 years. But, account holders can extend the duration of the account by a block of 5 years.

Why should you invest in PPF?

1. PPF offers High interest rates:

Interest rate on the PPF is currently 7.1 per cent.

2. Maximum amount of investment in PPF

The maximum amount of investment through the PPF is Rs 1.5 lakh every financial year, while the minimum investment is Rs 500 each year.

3. Tax-free interest income in PPF:

PPF offer exempt-exempt-exempt (EEE) tax benefit i.e. interest earned on the Public Provident Fund is tax-free.

4. Tax benefits under Section 80C:

A sum of Rs 1.5 lakhs invested every year, qualifies for tax benefits.

5. Partial withdrawal & loan facility:

The maximum amount that can be availed as loan from PPF account is 25% of the total amount accumulated in his PPF account by the end of the second fiscal year preceding the year in which the loan was applied for.

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