PPF Calculator: PPF is a small savings scheme run by the government. There is no risk to the investors in this scheme. It is a good option for long term investment.
It is of great benefit at the time of retirement. The income earned from this is tax free. Also, the interest earned on it is tax-free under section 80C of Income Tax.
Public Provident Fund (PPF) is one of the safest ways to build a tax free retirement fund. You have to pay tax on other high return investments like NPS or mutual funds, due to which PPF becomes more attractive for investors.
Can collect crores of funds
A minimum of Rs 500 or a maximum of Rs 1.5 lakh can be invested in this in a financial year and if you regularly invest in a PPF account, you can get Rs 1 crore on retirement.
To get a corpus of Rs 1 crore on retirement from the Public Provident Fund account, the investor has to deposit money for 25 years. If a person deposits 1.5 lakh rupees every year in his PPF account for 25 years, then he will get 1 crore rupees according to the current interest rate. On this, compound interest is available for a longer period. Due to which this amount increases to one crore rupees.
If someone deposits Rs 1.5 lakh every year for 20 years, then according to the end current interest rate, he will get Rs 66.60 lakh. If the investment time is extended for the next 5 years, then the PPF balance will become Rs 1 crore.
1.54 crore fund
If you open a PPF account between the age of 25 to 30 years and increase it thrice in a block of 5 years, you can easily invest for 30 years before retirement. An investment amount of Rs 1.5 lakh every year for 30 years can help you collect Rs 1.54 crore on maturity.
Rules to increase PPF account
Investment in PPF can be done in lump sum or in 12 equal instalments. This scheme is for 15 years. But it can be extended further. For this, a form has to be filled by going to the bank. In which investment option is given. In five years time, you can extend its deadline.
The specialty of Public Provident Fund is that only this investment in India has got the benefit of Triple E tax exemption. Here Triple E means – There is no tax on the money you invest. The interest earned on it is also tax free and the amount received as maturity after 15 years is also not taxable. Your deposited amount of Rs 1.5 lakh in this account is completely trucks free.
The interest earned on PPF account is higher as compared to other savings schemes. At present, interest is available on PPF at the rate of 7.1 percent. Guaranteed returns are available on PPF in the same way as other schemes.