It’s a known fact that due to flexible nature Public Provident Fund, commonly known as PPF. For both small and big investors, a tax benefit PPF offers makes it a highly cost-effective plan. In 1968, the Public Provident Fund plan was introduced by the Ministry of Finance, Govt of India. In the Section 80C of Income Tax Act, 1961, it is clearly stated during PPF tenure will be exempted from an individual’s tax liability. A PPF deposit of 1.5 lakhs to the exemption and amount received on maturity is tax-free. Basically, the PPF scheme can be considered as the most tax-efficient and the best money-saving scheme.
MoneyMindz.com, Best On-Call Financial Advisory Portal gives you a brief about the best option to save tax, “Public Provident Fund” through this article.
PPF is one of the most popular saving and tax-savings option supported by the Indian Government. In 1968, the National Savings Institute introduced this scheme. This scheme mainly focuses on rationalizing small investments by offering investors reasonable returns.
One has to open a PPF account to start with the PPF scheme availing the benefits in return. You can open the account at nationalized bank, at the post office through online. The relevant documents need to be provided with initial opening amount together with the required forms for the specific purpose.
Kinds of Interests Accrued on PPF Investments:
An interest rate on PPF accounts is offered by the Government of India. The interest is profitable for the investor. This is due to each year the principal amount increasing and interest is calculated on the same.
Investment Amount / Monetary Deposit:
The main motto of this PPF scheme is to help Indian in saving money. It is always advisable to open an account on a low amount of money.
A minimum amount of INR 500 has to be deposited under this scheme. In a year the maximum limit of deposit is INR 1, 50,000.
A person’s PPF account is valid for 15 years. Only for this duration, the account is private. If you want after successful completion of a specific frame, you can extend its validity. For five more years, the extension is allowed.
Charges for Opening An Account:
To open a PPF account, the charge is just INR 100. The investor has to pay a one-time payment with a minimum amount of INR 500. In this scheme, 500 rupees is the first deposit.
The investor has to submit a minimum amount of 500 in the PPF account each year to keep it active. For 15 years the same frequency has to be maintained.
During a financial year, an individual can deposit money maximum up to 12 times. After this no more deposits can be made under this scheme.
Benefits of PPF Scheme:
- It helps in tax exemption
- It is trustworthy and also a secure option
- Under this the policy amount is non-taxable
- It is useful for education, planning, retirement etc.
- There is provision of extension after maturity
- This scheme is available at numerous banks
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