PPF- Public Provident Fund in India
Pubic Provident Fund or PPF was introduced by the government of India in the year 1968. It was formulated and introduced by the National Saving Institute of Finance Ministry. PPF can be used for saving money and tax too. The motive of the govt. behind this was to encourage small savings by providing an option for investment with reasonable returns, all this is combined with income tax benefits. The central Government of India takes full guarantee of this scheme. PPF is a scheme that has many benefits and very less or no consequences at all. A person gets to invest and get guaranteed returns. The principal amount invested in it qualifies for the deduction, this is stated under Section 80C of the income tax act. Interest earned on the principal amount is also tax exempted under Section 10. People still don’t know much about the rules and benefits of PPF, it is very important to know everything before diving in it. here are all about the Public Provident Fund in India. Earn money from Snapchat
PPF is a scheme that runs minimum for 15 years and the can be extended for as long as the individual wants. People who are interested can open a PPF account in a designated Post Office and there are some banks that offer this service too. People can also transfer their PPF account from bank to post office or vice versa. There is no minimum age to be eligible for opening a PPF account, even the person with an EPF account can open a PPF account. An individual can deposit 12 times in one year, the only rule is to deposit before 5th of the month. If the body fails to do so, the interest will not be PPF- Public Provident Fund in India calculated for the full month. Best coupon Websites You Need to Visit
Rules and Benefits of PPF:
- Fruitful Interest: Firstly, PPF guarantees returns on even the smallest amount that is deposited. Although it is better to invest a decent amount so the returns can be higher. The rate of interest on PPF returns is decided by the government. The current earnings rate on PPF is 7.9%.
- Limit for Deposits: An individual has to maintain a minimum of 500 rupees per year to keep the account active. The maximum amount that a person can deposit in a financial year is 1.5 lakh rupees. If the deposit amount exceeds 1.5 Lakh rupees then it will be treated as an irregular deposit and no interest will be applicable on it. The excess amount will come as it is in the returns. PPF- Public Provident Fund in India
- Opening a PPF account for a Minor: There is no minimum age for opening a PPF account. However, if the person is below 18 then the account has to be opened and operated by one of the guardians. A person can open an account on behalf of a minor of whom they are a guardian. Sometimes the grandparents might wish to open a PPF account on behalf of their grandchildren but that is not allowed as per law. This can be done in one case though when the parents of minor are dead. PPF- Public Provident Fund in India
- How many accounts can one have: An individual can strictly have just one PPF account. PPF account can be transferred from a post office to a bank or vice versa but two accounts for the same person are not allowed. Although, a person may open a PPF account for their child and they can operate it. PPF- Public Provident Fund in India
- Premature Closure of Account: Before sometime only loans and partial withdrawals from PPF account were allowed. Now, an individual can close the PPF account even if it has not matured. There is still one condition, the PPF account should be fice financial years old, only after that the premature closure is allowed. The reason behind premature closure should also be strong, it is not allowed generally. On production of the educational expenses, for higher studies of either the adult or minor PPF account holder, the PPF account can be closed prematurely. Other than the educational expenses the account holders admission in a recognized institute has to be proved. PPF- Public Provident Fund in India
- Attachment: One more thing that is important is that PPF account and the balance in it cannot be attached by the court, that means the debtors cannot access one’s PPF account. However, the income tax authorities can access it while recovering the tax dues. Public Provident Fund in India.
How to open an Online PPF account: There are some banks that provide the option to open an online PPF account. The procedure of opening an online PPF account is very easy, below is a step by step guide on how a person can open an online PPF in one of the banks:
- Keep the following documents that are needed handy:
- ID proof (Aadhar/Pan Card/Voter ID)
- Address Proof
- Pay Slip
- Nomination Form
- Log in to the website of the bank and go to the Accounts tab and find Public Provident Funds.
- Confirm all the details that are required on the page that appears.
- Enter the amount to be deposited.
- Add a nominee and click on submit.
- If the account is linked to Aadhar card then the form will get submitted and account will be opened in a day.
Power of Compounding PPF:
Compounding means reinvesting capital gains or asset’s earnings, it is done to generate more earning/returns over the course of time. To gain maximum benefits from PPF an individual should invest the maximum possible amount in the initial years. This will give time to the funds to compound and grow and give maximum returns. PPF- Public Provident Fund in India
Conclusion: PPF is without any doubt one of the best options for saving money and tax at the same time. Opening a PPF account is very easy and there is no minimum age for the same. An individual who invests 2500 rupees yearly for 25 years can earn an interest of rupees 131,852 with current interest rates. From the above precedent, it is clear that PPF does provide some fruitful return to the individuals. PPF saves taxes and saves additional money on which people get returns, what more can one ask for. This is one of the best policies that the government is running as of now. Hope you like this article Public Provident Fund in India, please leave your comments below. PPF- Public Provident Fund in India