Public Provident Fund ie PPF account is an option for investment. Investments up to Rs 1.5 lakh annually in this PPF account are eligible for tax exemption under section 80C. There is no tax on interest income also. The amount received on maturity is also not subject to tax. In view of so many tax benefits, people open PPF account in their bank/post office. With its help, people add a lot of money. Public Provident Fund or PPF has been a favorite investment for many investors for many years. Because investing in PPF gives you many benefits. Such as: Investing in PPF offers tax benefits, attractive tax free interest, no tax at the time of maturity and is also guaranteed by the Government of India. In this article, we will discuss various aspects of PPF with you and try to answer some common questions about PPF accounts.
Where and how to open PPF account
If any person wants to open his PPF account, then he can open his account by going to the post office i.e. post office. Apart from this you can open PPF account in Government Bank SBI, Union Bank, Punjab National Bank, IDBI Bank etc and some private sector banks like ICICI Bank and Axis Bank. You can also transfer your PPF account from post office to one bank, one bank to another bank or Can also transfer from a bank to a post office. If you want, you can download the PPF Account Opening Form (PPF Account Opening Form) from the official website of State Bank and also open your PPF account online.
What is the interest rate of PPF
The interest rate of PPF account is notified by the Government of India every three months. If we talk about the interest rate so far, then it is 8.6% p.a. is. After the deduction, the interest on fixed deposits of one to three years will now be 5.5 percent. Which till now was 6.9 percent. That is, the interest on this has been cut by 1.4 percent. As per the notification, the interest on Sukanya Samriddhi Yojana will be 7.6 per cent for the first quarter of 2020-21 as against 8.4 per cent so far. Interest rates on PPF and NSC have been cut by 0.8 per cent and 1.1 per cent, respectively. After this deduction, the interest on PPF for the first quarter of 2020-21 will be 7.1 percent. Whereas on NSC it will be 6.8 percent. Now 6.9 percent interest will be available on Kisan Vikas Patra. Which till now was 7.6 percent. The maturity period on fresh interest has become 124 months from 113 months earlier. Interest on these fixed deposits is paid on quarterly basis. Interest on five-year fixed deposits has been reduced to 6.7 per cent. Which till now was 7.7 percent. Interest on these deposits is paid every quarter. Interest on five-year recurring deposits has been reduced by 1.4 per cent. After this deduction, the new rate will be 5.8 percent. Interest on the five-year Senior Citizen Savings Scheme (SCSS) has been reduced by 1.2 per cent to 7.4 per cent. Which was 8.6 percent till now. Interest on SCSS is also paid on quarterly basis. However, interest on savings account has been retained at 4 per cent.
How much can you invest in PPF every year
- Minimum contribution in a financial year: Rs.500.
- Maximum contribution in a financial year: Rs 1.5 lakh.
- You can deposit PPF maximum 12 times in a year. You have to deposit Rs 500 or more in one go.
- You do not need to deposit the same amount every time in PPF. But you cannot deposit more than Rs 1.5 lakh in a year.
- If you want, you can also open a PPF account for your children. Keep in mind that it is necessary to have a Guardian in the account of minor children.
When does PPF account mature 2021
The PPF account matures after 15 years from the end of the financial year in which you have opened the PPF account. For example, if you have opened the account on June 20, 2016, your PPF account will mature on March 31, 2032.
On PPF maturity, you can have three options:
- Close your account and withdraw the entire deposit amount.
- Extend PPF account for a period of 5 years without any further contribution.
- Extend the PPF account for a period of 5 years with further contributions.
PPF account is allowed to be closed before 15 years
At this time provision has been made that if you can close your PPF account even before the completion of 15 years. But it also has some conditions. You can close the PPF account after 5 years in some cases. PPF account can be closed for the treatment of family members or for higher education of the account holder. Keep in mind that for early closure of PPF account, you will also have to pay some penalty. There is a penalty of 1% of the interest rate for all the years invested in PPF if it is closed before 15 years. You will get one percent interest return every year.
After how many years can you withdraw money from PPF?
If any person wants to withdraw his PPF before time, then he can withdraw his PPF anytime. You can withdraw some money after five years from the end of the year in which you opened the account. For example, if the account was opened in July 2014, then you can withdraw some amount from your PPF account from 1st April 2020. You can withdraw up to 50% of the PPF account balance as on March 31, 2017 and March 31, 2020, from April 1, 2020 to March 31, 2021. You can withdraw up to 50% of the PPF account balance as on March 31, 2018 and March 31, 2021, from April 1, 2021 to March 31, 2022. After 15 years the rules become easy. If you have opted for Extension with Contribution, you can withdraw up to 60% of the PPF balance at the time of maturity in the next five years. If you have opted for Extension without Contribution, there is no restriction on withdrawal. You can also withdraw all the money if you want. But keep in mind, you can withdraw money only once in a year.
loan from ppf account
Yes, you can take a loan from the third year to the sixth year of opening your PPF account. This means that you can take a loan from your PPF account from one year after the end of the year when you opened the account, till 5 years later. You will not be able to take a loan from the sixth year onwards. This is because after that you can withdraw money from your PPF account. If you open your PPF account in July 2014, you can take a loan from April 1, 2016. You can avail this facility till March 31, 2020. And if you have a loan up to 25% of your PPF account balance as on March 31, 2015, you can take a loan. And if you can withdraw up to 25% of your PPF account balance as on March 31, 2016.
Which form to use?
10 Benefits of PPF Account
- PPF account cannot be opened in joint names like you include the name of any of your partner in savings or current account, but PPF account can be opened by only one person, although in this you can make a nominee in it. .
- If your contribution to the PPF account of a minor is from the income of the parent/guardian, then the parent/guardian can claim tax exemption under section 80C of the Income Tax Act.
- When the child turns 18, an application has to be submitted to change the status. During this, the signature of the account holder is attested by his parents. After this, the operation of the PPF account is given to that child.
- An NRI cannot open a new PPF account but NRIs can continue their existing PPF accounts. They cannot make fresh contribution to their existing PPF accounts.
- Interest in PPF account is calculated on the minimum balance between the 5th and the last date of every month. Hence the subscriber should deposit his contribution or lump sum amount before the 5th of every month to maximize the interest.
- On completion of 7 years of PPF account, you can withdraw some amount from it. Partial withdrawal from PPF is also tax-free.
- The tenure of PPF account is 15 years. The account can be continued on maturity after 15 years. There is no need to deposit money in the account after maturity. If you want, you can continue the account even after 15 years without any contribution.
- If you want to continue your contribution to the account even after the completion of 15 years, then within 1 year from the date of maturity of the account, a form has to be filled and submitted, in which it is given that you want to continue your contribution. want.
