What is PPF Calculator?
PPF or Public Provident Funds is a scheme which was introduced by National Savings Organization in 1968 to mobilize small savings and help people also get tax benefits
. The savings under PPF are fully tax exempted and gives around 8.0% returns
with a lock in period of 15 years. After the maturity of your PPF account you can even extend it by next five years however one person could have only one PPF account with him at one time.
Benefits of PPF
Some of the benefits of a PPF account are as mentioned below --
- This savings account comes with minimal risks with sure shot returns as promised by the then government. All its investments are backed and covered by the government and a huge number of people invest into it giving a large pool of money to help you save from any calamity.
- It can be opened in any of the nationalized bank or post office or some of the private banks as well and you could invest as low as INR 500/- with upper limit of around INR 1,50,000.
- Tough the account comes with a locking period of 15 years but one could partially withdraw his amount after 7 years as well. It is also very attractive investment when compared to most of the FDs.
- The best part about PPF account is that it falls under EEE category, that is the principal investment, the interest earned and any proceeds after maturity are tax exempted. This is not only applicable to primary owner but if you have a PPF account for your wife and your child then that is also tax exempted.
Investments limits under PPF
The PPF account comes with very flexible investment limits and most people invest into this account one to save taxes and another to build a corpus for their retirements. You can invest as low as INR 500 and go up till INR 1,50,000. However, one could have only one account in his or her name and the amount invested is fully exempted with all the interest earned under section 80C.
Who can Invest in PPF?
To invest into PPF account, one only must be a citizen of India. There are no other eligibility criteria to invest into this account.
Tax Saving under PPF Investments
You tend to get a tax savings of all the amount (limit up to INR 1.5 lacs) under section 80C.
Also the interests eared through this investment and all the proceeds are tax exempted. Even if you have opened an account for you child and wife, then that is also 100% tax exempted.
Hence it gives you multiple options to save your taxes.
Transfer of PPF Account
One can very easily transfer his or her PPF account from one bank to another. It must be transferred to another authorized bank or post office. In such a case, a PPF account will be a continuing account. One need to submit his PPF transfer request in the bank or post office where his PPF account is held. Then that existing bank or post office will arrange to send the original documents like certified copy of account, the account opening application, nomination form, specimen signature etc. to the new bank as provided by the customer. Once these are received by the branch office of new bank, the customer will be intimated about the same and customer then must submit a fresh PPF account opening form (Form A), nomination form (Form E) along with original passbook of his account and a fresh set of KYC documents.
Interest Rates of PPF
PPF account have allow risk profile and tend to give better interest that most FDs do. It provides a return of 8.0% with a locking period of 15 years. It also tends to be fully exempted from any of the taxes under section 80C.
Facts about PPF
- It requires INR 100 to start a PPF account.
- PPF account have minimum deposit of INR 500 per year and INR 1,50,000 per year.
- PPF is compounded annually at an interest rate of 8.0% w.e.f. January 1, 2019
- Premature withdrawal is allowed after 7 years of investment. One can withdraw about 50% of the balance in the account at the end of immediate preceding year.
- PFF stands in EEE category that is its principal amount, the interest earned and any proceeds from this accountare fully tax exempted under Section 80C.
- One can also borrow a loan against his PPF account.
- One can extend his PPF account by next 5 years after completion of its 15 years.