PPF Account se Milegi Pension : After retirement you can get a regular pension of ₹ 60989 per month, that too completely tax free. That’s all we are going to tell you today – Actually, there is a government scheme called PPF which can make this arrangement for you, so keep reading this news, and know how…
Tax-Free Pension: After retirement, you can get a regular pension of ₹60989 per month, that too completely tax free (Tax Free Monthly Pension). That’s all we are going to tell you today – Actually, there is a government scheme called PPF, which can make this arrangement for you, so keep reading this news, and know how…
Public Provident Fund Account, i.e. PPF account, i.e. Public Provident Fund Account, i.e. Lok Pratyavnidhi Account – every employed person has heard this name at some time or the other, and many Indians have also opened an account under the PPF scheme. PPF Account is the most popular among the small savings schemes run by the Central Government to provide an opportunity to save for the future and earn completely tax-free interest, and if regular investment is done in a disciplined manner, then it can definitely make you a millionaire on retirement. NDTV readers/users have already been informed that a PPF account can help accumulate ₹2.27 crore in 35 years and a PPF account can make an investor a crorepati in 25 years.
Where and how to open a PPF account?
First of all, let us know that any Indian can open an account in the very popular savings scheme PPF by going to any post office or any branch of any bank, in which the account holder has to deposit a minimum of ₹500 and a maximum of ₹1,50,000 during every financial year (1 April to 31 March).
No tax is ever levied on the EEE category scheme PPF.
It will also be good to know important and beneficial things about PPF, so remember, income tax exemption is available on the amount deposited every year in the PPF account, the interest you get every year in this account is also not taxable, and the entire amount received at the time of maturity also does not come under the purview of income tax at all.
How a PPF account will make you a millionaire in 25 years…
Now let us tell you how to arrange a pension of about ₹61000 every month on retirement. If you are 35 years old, and you open a PPF account at the beginning of this financial year and deposit ₹1,50,000, then on March 31 next year, ₹10,650 will be added to your PPF account as interest, because at this time the Narendra Modi government at the Center is paying interest at the rate of 7.1 percent on the amount invested in PPF. Due to this interest, on the very first day of the next financial year, i.e. April 1, 2025, a balance of ₹1,60,650 will be visible in your PPF account, which will become ₹3,10,650 if you deposit ₹1,50,000 before April 5 in the new financial year. After this, on March 31, 2026, the interest at the same rate will be ₹22,056, and the balance will become ₹3,32,706. Now you, i.e. the PPF investor, have to deposit ₹1,50,000 in your PPF account every year between 1 and 5 April. In this way, with the help of disciplined investment, at the time of maturity, i.e. after 15 years, you will see ₹40,68,209 in your PPF account, out of which ₹18,18,209 will be the interest amount, and your original investment would have been ₹22,50,000.
If you opened a PPF account at the age of 35, then at the time of maturity you will be 50 years old, but there are still 10 years left for retirement. As per the rules related to PPF account, you can extend your PPF account in blocks of 5 years by applying before maturity. The extension available for five years each can be availed unlimited times. Now at the age of 50, you extend your account, and maintain the annual routine of investment. Now your PPF account will be on the verge of maturity when you will be 55 years old. At that time, ₹66,58,288 will be visible as deposit amount in the PPF account, in which ₹36,58,288 will be as interest, and your investment will be ₹30,00,000.
Now extend the PPF account once again, and keep investing every year as before, because your journey of becoming a millionaire and earning a monthly pension of ₹61000 will just begin. This time after five years, when your PPF account matures, you will be 60 years old, and the total amount in your account will have crossed the figure of one crore. At that time, a total of ₹1,03,08,014 will be deposited in your PPF account, in which your investment would have been ₹37,50,000 and the government has added ₹65,58,015 to your account as interest.
How will you arrange for a monthly pension of ₹60989 from your PPF account?
Now read another rule related to the extension of a PPF account. Whenever you extend your PPF account, you have two options. One – Investment will continue after extension. Two – Investment will not be made after extension. Till now you have extended your account twice, but you did not stop investing, so the amount kept growing very fast. But now after retirement, investing will not be easy and convenient, so now the time has come to get pension without making a new investment.
You will get interest of ₹7,31,869 without making a new investment in your PPF account…
So, now you will not make a new investment this year, but will continue the account. So, this time the accumulated deposit will also remain ₹1,03,08,014, and at the end of the year, you will get interest of ₹7,31,869. Here we are assuming that the interest rate which is prevailing today will remain the same.
Now know another rule about withdrawal of money from PPF account. When you choose to extend the PPF account without investing, you get the right to withdraw money once in a financial year. All you have to do is withdraw only the interest amount every year, that is, now you can withdraw only this year’s interest amount of ₹ 7,31,869 from your PPF account and deposit it in your savings account. This amount is your pension, which if divided in 12 months, then you can keep spending ₹ 60989 every month.
Another interesting fact worth remembering is that despite this withdrawal, your accumulated amount in the PPF account will remain ₹ 1,03,08,014, and next year you will be able to withdraw the interest received on it of ₹ 7,31,869. The most beneficial thing about this withdrawal is that the interest amount withdrawn every year will be completely tax free, meaning you will never have to pay income tax on this amount.
It is important to remember some important things about PPF account…
- The interest rate on PPF account is decided by the Central Government every quarter, hence, if the interest rate fluctuates, the amount received on retirement may also fluctuate.
- PPF will be most beneficial for the investor if he invests in the first five days of April so that he can get maximum interest.
- Remember, the maturity amount mentioned in this news is based on running the PPF account continuously for 25 years, hence if the initial age of the investor is more than 35 years, or he does not extend the PPF account at least twice after the first routine maturity of 15 years, then the maturity amount may be less.
