If you are looking for a government scheme that gives tax exemption and guaranteed returns, the Public Provident Fund (PPF) could be the best option for you.

This scheme is safe and a strong long-term retirement fund for investors. It is government-backed and completely risk-free. It offers EEE (Exempt-Exempt-Exempt) tax benefits, which means the investment amount, interest earned, and maturity amount are all tax-free. Now, let’s see how you can earn ₹2.88 lakh annually from PPF. Let’s find out the secret formula of PPF.

Who Can Open a PPF Account?

Any Indian citizen can open a Public Provident Fund (PPF) account in their own name at a post office or bank. You can also open a PPF account in the name of a minor.

Each individual can open only one PPF account. There is no joint account facility. If both husband and wife are working, they can open separate accounts, which gives double tax benefits and more investment opportunities for the family.

Investment, Interest, and Returns

The government currently offers 7.1% annual interest on PPF. This compounds every year, meaning you earn interest on your investment and on the interest already earned, which grows your balance faster.

The PPF account tenure is 15 years, and it can be extended in blocks of 5 years. You can invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh per year. If both husband and wife open separate accounts, the family can invest up to Rs 3 lakh per year.

If you invest Rs 1.5 lakh per year for 15 years, your maturity amount will be around Rs 40,68,209. Of this, about Rs 18,18,209 comes from interest alone, all tax-free.

After 15 years, if you keep this amount in the account at the current interest rate of 7.1%, you can earn around Rs 2,88,842 per year in interest without making any new investment.

How to Earn Interest Without New Investment

  1. The special feature of PPF is “Extension Without Contribution”. After 15 years, you can extend your account without adding new money.
  2. During this period, you will continue to earn interest on the amount already deposited, which grows your money every year.
  3. For example, if your account has Rs 40 lakh, you can earn up to Rs 2.88 lakh per year in interest only without depositing more money.

Why PPF Is Special

  • Tax-free returns – No tax on interest or maturity amount
  • Guaranteed returns – Safe investment at government-fixed interest rate
  • Loan facility – You can take a loan or partial withdrawal if needed
  • Great for retirement – Provides stable, secure long-term returns

PPF is not just a savings scheme but a way to create lifelong income. By investing and using the Extension Without Contribution, you can earn lakhs of rupees every year, completely tax-free, without making new investments.