One should make investments which helps to save tax as well as earn maximum return on the said investment. Investment in Public Provident Fund (PPF) is the most popular tax saving tools for individuals. Here are some important factors in relation to PPF:
Investment in PPF is mostly used by the investors as it contains zero rated risk and every investor want risk â€“ free return on their investment
Opened in name of:
Individuals â€“ name of self, spouse or of minor child, of whom he/she is the guardian.
HUF â€“ name of any member of the family.
Minimum duration of a PPF accounts is 15 years.
Minimum deposit of Rs. 500 in a financial year upto the limit of Rs. 1,00,000/- and in no more than 12 instalments in a financial year.
Where can be opened
PPF account can be opened with any office or any branch of the State Bank of India, its associated banks, or with some other nationalized banks, or post office etc.
Interest is allowed at a rate notified by the Central Government, from time to time. At present, the rate of interest is 8.6%.
PPF provide â€œthree â€“ wayâ€ exemptions:
- Contribution/Investment â€“ Eligible for deduction u/s 80C upto a maximum limit of Rs. 1 lakh.
- Interest â€“ Interest earned is totally exempt from tax.
- Maturity Amount â€“ Amount received at the time of maturity is also fully tax free.
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