Public Provident Fund (PPF) still stands tall amongst all the investment cum tax saving plans. PPF also acts as a retirement plan for those who do not have any structured pension plan covering them.

If you are looking to save taxes and also have a long term secured investment plan, then you should go for PPF. The PPF account can be opened by an individual in his own name, or on behalf of a minor of whom he is a guardian.

Things you should know about PPF:

• Amount Invested, Maturity, Withdrawal, Premature, Lapse in deposit

The Minimum deposit required to be invested in a PPF account is Rs. 500 and maximum is Rs. 70,000 in a financial year, with maximum number of deposits allowed is twelve in a year.

The maturity period of the PPF account is 15 years, with 8 per cent rate of interest compounded annually.
The account holder can retain the account after maturity for any period without making any further deposits. In this case the account will continue to earn interest at normal rate as admissible till the account is closed.

The account holder also has an option to extend the PPF account for any period in a block of 5 years at each time, after the maturity period of 15 years.

Further, if the deposits are not made in a PPF account in any financial year, the account will be treated as discontinued. The discontinued account can be activated by payment of the minimum deposit of Rs.500 with default fee of Rs.50 for each defaulted year.

Premature closure of a PPF Account is not permissible except in case of death. Nominee/legal heir of PPF Account holder cannot continue the account after the death.

Premature withdrawal is permissible in the 7th year of the account subject, to a limit of 50% of the amount at credit preceding three year balance. Thereafter one withdrawal in every year is permissible.

• Facility of Loan
In case of emergency situations before the 7th year, you can take loans from your PPF account. You can take loans between 3rd and 6th year of opening the PPF account. The maximum loan amount available will be equal to 25% of the balance at the end of the 2nd immediately preceding year.

The rate of interest on the loan is usually 2% over and above the rate of interest you receive in the PPF account. This loan has to be repaid within a period of 24 months.
Once you repay a loan, another loan can be taken as long as you are within the 3rd and the 6th year of opening the account.

• Nomination Facility Available
You can specify a nominee for your PPF account. The nominee would get the trusteeship of this account in case your death occurs before the closure of the PPF account.

• PPF In addition to Provident Fund (PF)
The benefits of Public Provident Fund are many-fold. Many of these benefits are available through Provident Fund (PF) as well. Still, if you feel the PF deductions alone are not enough, you can open a PPF account.

• PPF – Excellent for non-salaried People
PPF becomes more significant for non-salaried individuals, as they don’t have option for provident fund PPF is an ideal vehicle to safely build the corpus for retirement.

• Where can a Public Provident Fund (PPF) account be opened?
A PPF account can be opened at any branch of State Bank of India and its subsidiaries or at the head post offices or sub post offices or at branches of the nationalized banks engaged in the collection of direct taxes.
On opening of a PPF account, a passbook is issued. This passbook is used to record all the transactions for that PPF account – deposits, interest earned, withdrawals and loans.

• Tax benefits for investing in PPF Account
At the present taxation laws in India, PPF works on Exempt Exempt Exempt regime that is:
The deposit made in PPF is deductible from your income under Section 80C of the Income Tax Act. This means that your entire investment in PPF can be tax free, subject to the provisions of Sec 80C.
Interest earned on the PPF Account is also exempt under section 10 of the Indian Income Tax Provisions.
Withdrawal received from the PPF account is also exempt from the tax.
The balance that accumulates over time is exempt from wealth tax.

Things you should keep in mind before investing in PPF
• The interest rate keeps changing;
• Lengthy lock-in period;
• Interest is calculated on the lowest balance;
• Lack of liquidity

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