INTRODUCTION
The Public Provident Fund (PPF) is a long term saving scheme which is proposed by Indian Government in 1968. It mainly focuses increasing saving among the people by safe investment option, attractive interest rates and tax benefits. The major benefits of opening PPF Accounts is it provides tax benefits under 80 C Deduction apart from that the interest and return earned on it is tax free.
ATTRIBUTES OF PPF
PERIOD: The minimum tenure of PPF Account 15 years.
INVESTMENT LIMITS: PPF Accounts provides the maximum limit of 1.5 lakh and minimum investment of 500. These investment can be made in maximum 12 instalments.
OPENING AMOUNT: It can be with opened with 100/- Rs per month.
MEANS TO DEPOSIT: In PPF account we can transfer fund many ways like cash, cheque, demand draft and online transfer as well.
TAX BENEFITS: The amount of interest and return earn on this is Tax free under section 80C of Income Tax Act, 1961.
WITHDRAWL: After the 5th financial year PPF amounts can be withdrawn partially.
STRUCTURE OF PPF
| Key Points to Note | |
| Interest Rate | 7.1% |
| Minimum Investment Amount | 500/- |
| Maximum Investment Amount | 1.5 lakh |
| Lock In Period | 15 years |
| Risk Profile | Risk Free return |
| Tax Benefit | Up to 1.5 lakh under section 80C |
ELIGIBILTY TO OPEN PPF ACCOUNT
Any Indian citizen can open a PPF account
NRI’s (Non-Resident Indians) cannot open the PPF account but can maintain the existing ones.
HOW CAN WE OPEN PPF ACCOUNT
It can be opened either with the bank or the post office. First you have to fill out the application for the opening of the account. And then it requires some documents to attach like identity proof (Aadhaar, passport), Address Proof (Bills & Rental Agreement) and a passport sized photograph by this simple procedure any Indian resident can open the PPF account at last the person have to make some initial deposit for activation of the account.
HOW TO INVEST IN PPF ACCOUNT
We can choose the contribution frequency—monthly, quarterly, or yearly.
Additionally, we can deposit the amount directly at the bank or post office, or via net banking.
BENEFITS OF PPF ACCOUNT
It is secured and safe in nature because it is backed by the government
It has attractive interest rates
It also give the facility in tax. The amount of interest and return earned are tax free under section of 80C of Income Tax Act
It also provides the facility of partial withdrawal
It is portable in nature
CONCLUSION
The main motive of PPF account scheme is to attract people and aware them about saving. So that people can learn about the healthy savings. It is also backed by the government so it is secured in nature. Because of this, people tend towards it and apart from that it also provides tax benefit. It’s also available for minor as well. So, being a PPF account holder can provide so much than other investment plans.
