PPF Rules: Do you know that after the maturity of PPF scheme, it can be used as monthly income? There is a rule to extend the Public Provident Fund even after maturity and to withdraw from it.
PPF, Public Provident Fund: Post Office’s small savings scheme Public Provident Fund is a very popular scheme for investment and savings in the country. This small savings scheme is also known as a retirement savings scheme. But do you know that after the maturity of this scheme, it can also be used as monthly income? There is a rule to extend the actual Public Provident Fund even after maturity and to withdraw from it. By taking advantage of this special rule, tax free income of Rs 24 thousand can be made every month. You should know about this special rule.
PPF Rules: Facility to extend
There is also a facility to extend the Public Provident Fund after maturity i.e. 15 years. This account can be extended for 5 years at a time. That is, you can extend it for 5 years each.
If you extend the scheme without investing after the maturity of 15 years, then after 15 years you will continue to get 7.1 percent annual interest (PPF Interest Rate) on the closing balance. On the other hand, if you extend it with investment, then interest on interest will be added to the scheme in the same way as before maturity.
When you extend the scheme for 5 years without investing, then you can withdraw any amount once in a year. Whereas if you extend it with investment, then you can withdraw up to 60 percent of the amount once in a year.
PPF Calculator: How much fund on maturity of 15 years
If you deposit maximum in PPF in every financial year till maturity i.e. for 15 years, then as per the current interest rate, a total fund of Rs 40,68,209 can be raised.
- Maximum deposit in a financial year: Rs 1.50 lakh
- Interest rate: 7.1% per annum
- Total deposit in 15 years: Rs 22,50,000
- Total fund after 15 years: Rs 40,68,209
PPF: How will the monthly income be
Here you ran the scheme for 15 years and prepared a fund of Rs 40,68,209. Now if you extend it for 5 years without investing anything, then you will get 7.1 percent interest on the closing balance. At the same time, you can withdraw any amount at once in a year. Let’s assume that you plan to withdraw only the interest money once in a year.
Here you will get 7.1 percent annual interest on your closing balance. This will be Rs 2,88,843 in a year. You can withdraw this entire interest amount once in a year. If you divide it in 12 months, it will be Rs 24,000 per month. There will be no tax on this withdrawal.
PPF: If you invest for 20 years
- Maximum deposit in a financial year: Rs 1.50 lakh
- Interest rate: 7.1% per annum
- Total deposit in 20 years: Rs 30,00,000
- Total fund after 20 years: Rs 66,58,288
Now if you extend it for 5 years without investing anything, you will get 7.1 percent interest on the closing balance. This will be Rs 4,72,738 in a year. You can withdraw this entire interest amount once in a year. If you divide it into 12 months, it will be Rs 39,395 per month.
How to open a PPF account?
Any Indian citizen can open this account in Post Office Small Savings in his or his child’s name. These are the documents required for this.
- KYC documents verifying a person’s identity, such as Aadhaar card, voter ID card, driving license etc.
- PAN card
- Address proof
- Form for declaration of nominee
- Passport size photo
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