Public Provident Fund (PPF): If you wish to double of your investment and save income tax as well on the money you are earnings? This seems to be a invested trick but what if PPF scheme is Government PPF scheme. PPF currently offer 8% interest rates. It is one of the safest investment Option available with high returns and Tax Benefits. PPF was Introduced by National Savings Organization in 1968 to start small savings in 1968, the PPF currently offers 8% interest rate. You can invest a minimum of Rs 500 and a maximum up to Rs 1.5 lakh/year in a PPF account. Investment can be done in installment, maximum 12 per year or as a lumpsum. The duration of PPF scheme is 15 years. On request of the subscriber, the account can be extended for 1 year or more blocks of 5 years each.
PPF calculation on Invest returns: Below is what you can expect to get as a return on your investment after the completion of the 15-year maturity period.
Suppose you are investing Rs 1.5 Lakh/year for next 15 years. The Total Investment you will be doing during this duration would be Just 22.5 Lakh. At the maturity you will get Rs 46 Lakhs
Similarly suppose, for an investment of Rs 1 Lakh/year, you can get around Rs 31 lakh on your total investment of Rs 15 Lakh in 15 years.
By investing Rs 50,000/year, you can get around Rs 15 lakh (Your total investment would be just Rs 750,000). By investing a small amount of Rs 5000/month, you can get around Rs 18 lakh after 15 years.
You can use free PPF calculator and make an approximate calculation of the return on PPF investment. The PPF interest rate can change slightly over a period of time. The government determines the rate of interest on a quarterly basis.
Tax benefits: Under Section 88 of IT Act, income tax benefits apply for the investment and interest income from PPF account. The amount outstanding to the credit is fully exempted from Wealth Tax also. Moreover, the PPF comes with loan benefits depending upon the age of the account and balances as on the specified dates. You can not close PPF account before 15 years. But you can withdraw you PPF partially after 7th Year.
Where to open PPF account?
You can open a PPF account with your bank as well as the Post Office. Check their websites for more details before investing. When you login into your Net Banking, Every Bank website will show you option to Open PPF account Online.
Below is PPF calculation yearly at 7.6% interest rates.
|Year||Opening Balance||Amount Deposited||Interest Earned||Closing Balance||Loan (Max.)||Withdrawal (Max.)|