All About Public Provident Fund (PPF)
02 Mar 2023
All about Public Provident Fund (PPF)
Public Provident Fund commonly known as PPF is a long-term investment option that offers fixed attractive returns every year with taxation benefits under Section 80 C of the Income Tax Act.
Understand PPF in 5 easy steps
1. Tax benefit
Investments in PPF are eligible for tax deduction under Section 80C. PPF is among the rare investments that get a tax benefit at all three stages (EEEs) –Exemption on initial investment under section 80C of the Income Tax Act, Exemptions on the returns on investment made and Exemption on withdrawal of investment proceeds.
2. Interest rates
The PPF interest rate is mandated by govt . The current rate of interest stands at 7.1 % for financial year 2022-2023.
3. Liquidity
PPF investments are locked in for a period of 15 years. Partial withdrawal post completion of seven years is available to the extent of 50 % at the end of the fourth year from the date of account opening.
4. Flexibility
One can invest in PPF from INR 500 upto INR 1.5 lacs every year. The investments can be made monthly/quarterly and annually.
Benefits of PPF
- Attractive tax-saving option
- Suitable for building retirement corpus
- Availability of loan upto a maximum of 25% of the PPF corpus
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