10 Important Features- Public Provident Fund (PPF) Scheme

10 Important Features- Public Provident Fund (PPF) Scheme

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10 Important Features- Public Provident Fund (PPF) Scheme

Public Provident Fund Scheme is the most popular savings scheme in India. It is framed and governed under Public Provident Fund Act (PPF), 1968. PPF is a government scheme where small amounts of funds can be an investment regularly. The aim of PPF is to provide retirement security for self-employed and workers from the unorganized sectors, hence PPF has a long lock-in period for investments. Following are the key highlights of PPF schemes

  1. Indian Citizen who is a Resident Indian can open PPF account. He might be salaried employee or self-employed or any other person.
  2. PPF account can be opened with the State Bank Of India, or its associates or any other Certified Nationalized Bank.
  3. PPF account is opened for a minimum period of 15 years. This tenure can be further extended for a minimum term of 5 years. Premature closure of account is allowed in certain cases after completion of 5 years.
  4. In a financial year, an investor can deposit minimum of Rs. 500 and maximum of Rs. 1,50,000/- in their PPF account.
  5. Government pays yearly interest on the balance in the PPF account. Interest earned in the PPF account can only be redeemed after maturity.
  6. Interest received from PPF investments is Tax Free.
  7. Deduction U/s 80C of Income Tax is available for the amount invested in PPF.
  8. Amount in PPF can be withdrawn from the 7th year onwards. This withdrawal amount is restricted to 50% of the previous years balance.
  9. Loan against the balance in PPF account can be availed after three years. Maximum of 25% of the balance in the PPF account is made available as the loan amount.
  10.  Amount received at the time of maturity is completely tax-free.

H&R Block India strives to blend tax expertise with a strong focus on continually improving the client experience to provide all its clients with an unparalleled value proposition for filing their Income Tax Online.

 Visit hrblock.in for more information or to find your nearest office.

Helpful links:

http://www.indiapost.gov.in/ppf.aspx

http://www.epfindia.com/index.html

http://en.wikipedia.org/wiki/Public_Provident_Fund_(India)

HRBlockIndia
HRBlockIndia
H&R Block India strives to blend tax expertise with a strong focus on continually improving the client experience to provide all its clients with an unparalleled value proposition for filing their Income Tax Online.

2 Comments

  1. Bharath Sharma says:

    I like ti enrol for PPF scheme. so please let me know what is the procedure to open PPF account.

    Thanks and Regards
    Bharath Sharma

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