What is PPF Account, What Are The Benefits of PPF Account

Benefits of PPF Account

Every person wants to earn money on the money that is being saved by him and he does not have to pay any tax to the government. Apart from this, they should be completely safe. If you also want to do something similar then the best option for you is PPF i.e. Public Provident Fund. What is PPF? How to open a PPF account? What are the benefits of PPF Account? You will be able to read all such information in this article.

What is PPF

The full name of the PPF is the Public Provident Fund. This is a government scheme in which you can invest money for your future. You get interest on this money and on this, you also get a tax rebate. This money is completely safe because this money is under the government. There is no hassle of drowning money in it. Here, you will get the money back with full interest. But keep in mind that you get money only after a certain time. You can understand it like RD.

About PPF Account

To invest money in PPF, you have to open a PPF Account. To open a PPF account, you have to go to your nearest post office or bank. You can open a single PPF account under this scheme. If you open more than one PPF account, then you will get interest and tax rebates on the same account. Meaning, the benefits of this scheme will be available on only one account.

What is The Interest and Investment Received on PPF Account

Interest from the PPF account is declared by the Government of India every three months. It does not remain the same. So you have to watch it again and again. Interest on a PPF account is calculated by compounding interest. Talking about investing in the PPF account, you can invest at least 500 rupees and a maximum of 1.5 lakh rupees in a year. You can deposit money in PPF account at least 12 times in a year. You can deposit at least 5 rupees at a time and can deposit up to 1.5 lakh rupees at most. You do not need to deposit the same amount every time.

When can I Withdraw Money From The PPF Account?

The deadline is set for withdrawing money from the PPF account. If you want to run it full time according to the government, then after opening an account in it, you will have to invest in it for 15 years. A PPF account matures in 15 years. After this, you can withdraw money if you want. In the case of PPF account maturity, you have the following options.

  • You can withdraw the entire amount with interest by closing your account.
  • You can extend your PPF account for 5 years without depositing money.
  • If you want to deposit money, you can proceed to the PPF account for 5 years.

If you want, you can withdraw your money even before 15 years, but there are some terms and conditions for this.

You can close the PPF account even in 5 years, but the reason for this should be the cost of treating family members or higher education of the account holder. If you close your account before maturity, then you have to pay a penalty on interest. You get a penalty of 1 percent on the interest rate. That is, you will get a one percent less interest rate.

If you do not want to close your PPF account and want to withdraw some amount from PPF account, then this can also happen. You can withdraw half of the money you deposited in 5 years after opening the account. Apart from this, even after 15 years, you do not need the entire money, then you can take out 60 percent of your share and run your account for 5 years.

Loan on PPF Account

Many people have a question of whether they can take a loan on a PPF account. the answer is yes’. You can take a loan during the third year to the sixth year of opening a PPF account. After the sixth year, you will not be able to take a loan because after this you can withdraw 50% or the entire amount. If you want to take a loan on your PPF account, then you can take a loan on 25 percent of the amount you have deposited during the loan period. You have to pay more than 2 percent interest on the loan and will have to pay it in 36 months. There is no shortage of benefits of PPF Account. You are earning along with saving of PPF Account opening.

What is The Tax Benefit on PPF Account

You can get a tax rebate on investment of 1.5 lakhs every year on the PPF account. On the PPF You can get a tax rebate on investment of 1.5 lakhs every year on PPF account. On the PPF account, you get tax exemption on investment up to 1.5 lakh under section 80C. But keep in mind that under section 80C you can avail tax exemption only on investments up to 1.5 lakh. Whether you invest this 1.5 lakh in PPF account or else under Section 80C. Apart from this, the interest you get from the PPF account is completely tax-free. That is, on the maturity of the PPF account, you do not have to pay any tax on the interest received from it. To avail of this benefit on PPF Account, many people open PPF Account.

More Than One Account in PPF

PPF cannot have two accounts in the name of the same person. If you have opened a PPF account in two places with the same name, then you will get the benefit of this on only one account, but if you want, you can open another account in the name of someone in the family. If you want, by opening another account in your wife’s name, you can invest 1.5 lakh rupees in it. In this way, you can invest a total of 3 lakhs. If your wife works somewhere, then they will get a tax rebate separately.

Hopefully, you have got information about the benefits of PPF Account in the article and how PPF Account works. You can follow our Facebook page for similar information.

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