This post is going to explain the benefits of having a PPF account. Many people thinks that PPF account is applicable only for salaried people, but in fact anybody can open a PPF account in India. If you still don't have PPF account read this post to get an idea about the benefits of having a PPF account.
According to Public Provident Fun Act 1968, PPF account can be opened by general public of India. PPF is an ideal investment option for both salaried as well as self employed classes. Non-Resident Indians (NRIs) are not eligible for PPF account. Also an individual cannot invest on behalf of HUF (Hindu Undivided Family) or Association of persons.
The investment can also be done in installments (max 12 times in a year).
Interest earned and the maturity amount you are going to receive are fully tax exempted. PPF investment, interest and maturity amount is totally tax free. What else do you want? :)
Loan facility available from 3rd financial year upto 5th financial year. The rate of interest charged on loan taken by the subscriber of a PPF account on or after 01.12.2011 shall be 2% p.a. However, the rate of interest of 1% p.a. shall continue to be charged on the loans already taken or taken up to 30.11.2011.
Withdrawal permitted from 6th financial year.
PPF account can be opened at any head post office or any SBI branch in India. When you open an account, you will be given a passbook in which all subscriptions, interest accrued, withdrawals and loans are recorded.
Even though some times fixed deposit provide better interest rate as compared to PPF remember the interest from fixed deposit is fully taxable where as PPF interest is tax free. If the interest from fixed deposit exceed Rs.10000/- in a year then you have to submit Form 15G/H so that TDS cannot be deducted on your earned interest. There is no concept like this on PPF account.
Also I recommend you to have PPF account via SBI bank branch because here you can even deposit money in your PPF account via online by linking your Internet Banking account. No need to visit your branch for depositing money in PPF. Cool way for banking :). I think investing in PPF account is a safe bet for employess as well as for students also. Share your views on PPF account by commenting below.
According to Public Provident Fun Act 1968, PPF account can be opened by general public of India. PPF is an ideal investment option for both salaried as well as self employed classes. Non-Resident Indians (NRIs) are not eligible for PPF account. Also an individual cannot invest on behalf of HUF (Hindu Undivided Family) or Association of persons.
How much amount I have to invest in PPF Account?
In Public Provident Fund account you can invest money up to Rs.1,00,000 (1 Lakh) in a financial year (Financial year starts on 1st April and ends on 31st March). Remember 1 lakh is just the maximum amount allowed for investment in PPF. If you are not capable of investing such huge amount then a minimum of Rs.500/- is also allowed. I mean you can invest any amount ranging from Rs.500/- to Rs.1,000,00/-. PPF account is of duration 15 years.The investment can also be done in installments (max 12 times in a year).
What is the Rate of Interest I am going to get in PPF Account?
The rate of interest on the subscriptions made to the fund on or after 01.12.2011 and balances at credit of the subscriber in the existing PPF account shall bear interest at the rate of eight point eight per cent (8.80%) per annum. But remember the rate of interest is not always constant. Government of India may revise the interest rate at any time. Some times it may also earn 8% and some times 9%. It all depends upon the government rules and regulations.Tax Benefits of having PPF Account
Investment up to INR.1,00,000 per annum qualifies for IT Rebate under section 80C of IT Act. That means if income tax is payable on your income then you can claim Rs.1 Lakh under saving in PPF so that tax cannot be applicable up to 1 lakh income.Interest earned and the maturity amount you are going to receive are fully tax exempted. PPF investment, interest and maturity amount is totally tax free. What else do you want? :)
Loan facility available from 3rd financial year upto 5th financial year. The rate of interest charged on loan taken by the subscriber of a PPF account on or after 01.12.2011 shall be 2% p.a. However, the rate of interest of 1% p.a. shall continue to be charged on the loans already taken or taken up to 30.11.2011.
Withdrawal permitted from 6th financial year.
PPF account can be opened at any head post office or any SBI branch in India. When you open an account, you will be given a passbook in which all subscriptions, interest accrued, withdrawals and loans are recorded.
Even though some times fixed deposit provide better interest rate as compared to PPF remember the interest from fixed deposit is fully taxable where as PPF interest is tax free. If the interest from fixed deposit exceed Rs.10000/- in a year then you have to submit Form 15G/H so that TDS cannot be deducted on your earned interest. There is no concept like this on PPF account.
Also I recommend you to have PPF account via SBI bank branch because here you can even deposit money in your PPF account via online by linking your Internet Banking account. No need to visit your branch for depositing money in PPF. Cool way for banking :). I think investing in PPF account is a safe bet for employess as well as for students also. Share your views on PPF account by commenting below.
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