PPF Scheme: Investing in a Public Provident Fund (PPF) account offers beautiful tax benefits. Contributions up to ₹1.5 lakh in a year are eligible for tax deduction under Section 80C. Moreover, the interest and principal earned on your investment are completely tax-free. PPF is a government-backed scheme in India that is currently offering an annual return of 7.1 per cent. The tenure of this scheme is 15 years, with the option to extend it in 5-year blocks. It is open to all salaried and self-employed individuals.
Can money be withdrawn from PPF before maturity
Although the maturity period of a Public Provident Fund (PPF) account is 15 years, the subscriber or account holder can still make partial withdrawals before maturity. Here are a few things to know:
- You can make a withdrawal once every financial year after completion of 5 years from the date of opening the account.
- Note that the lock-in period of 5 years includes the year of opening the account.
- For example, if you have opened your PPF account in the 2024-25 year, you can also make your first withdrawal in the 2030-31 year or later.
Know the withdrawal limit
While making withdrawals from your Public Provident Fund (PPF) account, there are a few limits to keep in mind:
- You can withdraw up to 50 per cent of the balance at the end of the previous year, or the end of the previous year, whichever is lower.
- For example, if you are making a withdrawal in the financial year 2024-25, you can withdraw up to 50 per cent of the balance by March 31, 2023, or March 31, 2024, whichever is lower.
What happens to a PPF account after 15 years
After completing the initial 15-year maturity period, you have unprecedented flexibility to manage your Public Provident Fund (PPF) account:
- You can choose to continue your account with or without further deposits.
- You can also extend it in 5-year blocks. This allows you to reap long-term benefits.
How to earn more than ₹18 lakh/year from PPF
To earn more than ₹18 lakh annually from PPF (₹18 lakh/year), you need to start investing ₹1.50 lakh every year and continue it till the maturity period of 15 years. Later, you can extend the account in unlimited blocks of 5 years for maximum returns. This is a long-term and disciplined financial plan.
What will be the PPF corpus after 15 years
In 15 years, the investment amount will be ₹22,50,000, the estimated interest will be ₹18,18,209, and the estimated maturity will be ₹40,68,209. The investor can take a 5-year extension and continue investing ₹1.50 lakh annually as before.
What will be the PPF corpus after 20 years
The total investment in 20 years will be ₹30,00,000, the estimated interest will be ₹36,58,288, and the estimated corpus will be ₹66,58,288. At this stage, the investor can take another extension of 5 years and continue investing ₹1.50 lakh annually.
How much will the PPF corpus be after 25 years
The total investment in 25 years will be ₹37,50,000, the estimated interest will be ₹65,58,015, and the estimated corpus will be ₹1,03,08,015. This is a great opportunity for you to become a crorepati.
How much will the PPF corpus be after 30 years
The total investment over 30 years will be ₹45,00,000, the estimated interest amount will be ₹1,09,50,911, and the estimated corpus will be ₹1,54,50,911.