Post Office Public Provident Fund (PPF) scheme is an option to get better returns. Those who invest in this scheme get tax benefits at 3 levels. Firstly, the benefit of deduction on investing, secondly no tax is payable on interest. The lump sum is tax free even at maturity. At present, the interest rate is 7.1 percent per annum, but it is ineffective from tax benefits and inflation. In this case, the net return is much more than this.
Investment of Rs 4,500 every month
If you invest Rs 4,500 per month or Rs 150 every day in the post office public provident fund, then according to the current interest rate on Maturity, you will get Rs 14 lakh 84 thousand. According to calculation, this scheme matures in 15 years. After investing Rs 4,500 every month, in 15 years this amount will be Rs 8,21,250. According to the interest rate of 7.1 percent per annum, Rs 6.63 lakh will come as interest. In this way, a total of 14.84 lakh rupees will be received.
Investment up to Rs 1.5 lakh
In this scheme, up to 1.5 lakh rupees can be invested in a business year. The deduction under section 80C gets an advantage when you invest. This will give you relief in saving tax. Interest income is completely tax free and maturity too. In this way, there is relief on three frontiers of tax. On the basis of inflation, retail inflation is currently more than 5.5 per cent. In this case, it is the best option in terms of net return.
Computation of interest on the basis of the balance on the 5th of every month
Interest in public provident fund is calculated on the basis of the balance of the 5th of every month. In such a situation, invest till 5th date. If there is a lapse of even one day, you will not get the benefit of interest for the whole 25 days. If this mistake is made every month, you will not get the benefit of interest for 300 days in 365 days. This saving instrument matures in 15 years. Up to a maximum of 1.5 lakh rupees can be deposited in a financial year. Minimum 500 rupees will have to be deposited.
‘PPF’s 15-year lock-in period reduced’
Meanwhile, SBI Research has recommended to the government that the government should reduce the lock-in period of 15 years for PPF (Public Provident Fund). Also, investors should be allowed to withdraw their money within the stipulated period. For this, the option to cut investors’ incentives can be discussed. An annual investment of Rs 1.5 lakh can be made in PPF. PPF gets the protection of the government. Its main objective is to make the unorganized sector, the retirement of people doing their own business safe.
PPF, EPF interest rates to be equal
SBI research has also suggested the central government to bring the interest rates of the Employee Provident Fund (EPF) and Public Provident Fund (PPF) to parity. The report said that the interest rates of EPF and PPF should be equal, so that people are encouraged to save more and more. However, this demand has already been made.
