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Public-Provident-Fund-Account-(PPF)

 

Public Provident Fund Account (PPF)

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Introduction-

Public Provident Fund is the best investment scheme with features of tax free income with tax exemption. It offers guaranteed, risk free returns. PPF account also offers customers facilities like loan, withdrawal, and extension of account.

 
“Investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future.”
   
Eligibility-
  • The account can be opened in any post offices or banks in India.
  • The applicant should be Indian resident.
  • The account can be held only in the name of one Individual, it cannot be opened in the joint names.
 
Minimum or Maximum amount can be deposited-
  • The PPF account can be opened with a minimum amount of Rs. 500 & with a maximum of Rs. 1,50,000 per annum.
  • Multiples of Rs 100, subject to the above limit.
  • There is a limitation of maximum 12 transactions in a financial year.
 
Opening of Account-
  • The account can be opened in the name of any member of the family.
 
Mode of Payment-
  • The amount can be deposited through cash, cheque, demand draft or online transfer.
   
Rate of Interest-
  • The Interest rate is revised from 3rd quarter @ 8.0% per annum (earlier in 1st or 2nd quarter of 2018 it was 7.6%).
 
Documents required-
  • Residential proof of the applicant
  • Identity proof of the applicant
  • Photograph of the applicant
 
Claim Tax Benefit-
  • The amount which you have deposited is covered under section 80C, can be claimed as tax benefit.
  • This scheme is covered under triple EEE (Exempt, Exempt, Exempt) category means that the amount which you have deposited is covered under section 80C, the interest earned thereon is tax free and even the maturity amount is also tax free.
 
Loan against PPF –  

You can also avail loan facility after completion of 3 years i.e. between the 3rd and 5th year, the loan amount can be a maximum of 25% of the 2nd year immediately preceding the loan application year. A second loan can be taken before the 6th year if the first loan is repaid fully.

 
Partial withdrawal- 

You can make partial withdrawal after completion of 6 years under any specific reasons like medical treatment, daughter’s marriage etc. (with supporting documents).

 
Maturity-
  • The complete amount can be withdrawn after completion of lock-in period of 15 years. The same account can be extended for further 5 years.
 
See the related post : Sovereign Gold Bonds Scheme



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