Tax-Free Investment

Contents

1 PPF Calculator — Public Provident Fund Maturity & Returns

PPF Calculator — Public Provident Fund Maturity & Returns

Calculate your PPF maturity amount with interest. EEE tax-exempt investment backed by Government of India.

EEE Tax Exempt15-Year Lock-inSection 80C

Visual Breakdown

PPF Maturity

Invested

Interest

PPF — The EEE Tax Star

PPF (Public Provident Fund) is the gold standard of risk-free Indian fixed-income. Triple tax exemption (E-E-E): exempt on investment (Section 80C), exempt on interest earned, exempt on maturity. Sovereign-backed. Current rate: 7.1% per annum.

Feature	Detail
Account Tenure	15 years (extendable in 5-year blocks)
Minimum Annual	₹500
Maximum Annual	₹1,50,000 (combined with all PPF accounts including minor’s)
Where to Open	Post Office, SBI, ICICI, HDFC, Axis, BoB, PNB, etc.
Interest Compounding	Annually (calculated monthly on minimum balance between 5th and end of month)
Section 80C	Up to ₹1.5L deductible (Old Regime)
Maturity Tax	Fully tax-free
Partial Withdrawal	From Year 7 onwards (max 50% of preceding year’s balance)
Loan Against PPF	From Year 3-6 (up to 25% of balance, interest 1% above PPF rate)

PPF Interest Calculation — The 5th-of-Month Rule

Interest is calculated on the LOWEST balance between the 5th of the month and the last day of the month. So depositing on the 4th vs 6th of the month can mean an entire month’s interest difference.

Best Practice: Deposit your entire annual ₹1.5L in April each year (before the 5th). You earn interest on the full amount for the entire financial year. Compounded over 15 years, this can add ₹15,000-25,000 extra to your maturity value compared to monthly deposits.

PPF vs Equivalent Alternatives

Instrument	Return	Tax on Interest	Net Post-Tax (30% slab)
PPF	7.1%	NIL	7.1%
5-yr FD (Tax Saver)	6.75%	Slab	~4.7%
EPF (Employee Provident Fund)	8.25%	NIL (after 5 yr)	8.25%
NPS Tier I (Govt + Equity)	9-11%	EEE for govt; LTCG for self-contributor exit	8-10% effective
NSC	7.7%	Slab (reinvested 80C)	~5.4%
Sukanya Samriddhi (for girls)	8.2%	NIL (EEE)	8.2%
VPF	8.25%	NIL on first ₹2.5L/yr	8.25%

For 30% slab taxpayers: PPF is among the top tax-adjusted returns. For lower slabs, 5-year FD becomes competitive.

PPF Worked Examples

Example 1: ₹1.5L Annually for 15 Years

At 7.1% rate, maturity = ₹40.68 lakh. Total invested = ₹22.5 lakh. Interest earned = ₹18.18 lakh — entirely tax-free.

Example 2: Extending Beyond 15 Years

After 15 years, you can extend in 5-year blocks. Continue investing or just let the existing balance earn interest. Total period: 25 years with continued ₹1.5L deposits = ₹91.5 lakh corpus.

Example 3: Partial Withdrawal Timing

From Year 7, you can withdraw up to 50% of the preceding year’s balance once per year. Useful for child education, home down-payment, medical emergency — without breaking the PPF.

PPF After 15 Years — Three Options

Withdraw Entire Maturity: Receive lump-sum tax-free. End of PPF account.
Extend WITH Contribution: 5-year extensions in blocks. Continue ₹500 – ₹1.5L annually. Continue Section 80C deduction.
Extend WITHOUT Contribution: Balance keeps earning interest; no new deposits required. Best when you’ve exhausted 80C through other instruments.

More FAQs

Can I have multiple PPF accounts?

No — only ONE PPF account per individual. You can also open one in your minor child’s name (as guardian), but the ₹1.5L annual limit is COMBINED across all your PPF accounts.

Can NRIs open PPF?

No new PPF for NRIs since 2018. Existing PPF (opened while resident) continues until 15-year maturity, but no extensions allowed after becoming NRI.

Is PPF available in the New Tax Regime?

You can still INVEST in PPF and earn tax-free interest under New Regime. But the Section 80C deduction (₹1.5L) is NOT available — losing the major tax incentive for high-bracket investors. PPF investment still makes sense if you want guaranteed tax-free returns regardless.

What is the PPF nomination process?

File nomination form at the time of opening or later. Up to 4 nominees allowed with percentage allocation. Critical — without nomination, succession in case of death goes through legal heir process (lengthy).

Can I transfer PPF between banks/post office?

Yes — fill PPF transfer form. Account number changes; balance carries forward. Useful if you change cities or want better digital service.

What if I deposit more than ₹1.5L in a year?

Excess amount over ₹1.5L doesn’t earn any interest and isn’t eligible for 80C deduction. Bank/post office may refund the excess. Track your deposits carefully to stay within ₹1.5L combined across all PPF accounts.

How is PPF rate decided?

Set quarterly by Ministry of Finance based on G-Sec yields. Current 7.1% has been stable since April 2020. Historically ranged 7-8.7%.

Best month to open PPF account?

April — gives full financial year for the ₹1.5L deposit and interest accrual. Opening in March means only 1 month before the year ends, losing nearly an entire year’s interest on that contribution.

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