Provident Fund (PF) & Voluntary Provident Fund (VPF: PF is automatically deducted from your salary. Both you and your employer contribute to it. While employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF). Current rate of interest is 8.5% per annum (p.a.) and is tax-free.

We have to initially open the Open the PPF account for 15 years and after the initial period of 15 years is over, one can keep on extending the deposit for a period of 5 years at a time. In fact, this is where the magic of PPF begins. One need not start a fresh PPF account and continue it for all of 15 years — just extend the old one for five years at a time, indefinitely. This way, the same PPF account offers additional liquidity to what is offered during the initial term.

Every individual desirous of subscribing to Fund under the Scheme for the first time either on his own behalf or on behalf of a minor of whom he is the guardian or on behalf of a Hindu Undivided Family of which he is a member or on behalf of an Association of persons or a Body of individuals as referred to in sub rule 2(b) of Rule 3 above shall apply to the Accounts Office in Form A, or as near thereto as possible together with the amount of initial subscription which shall be integral multiples of Rs.5

Interest 8.6% w.e.f 01.12.2011 (subject to change as per GOI/RBI directives) to be applied annually. (1) This Scheme may be called the Public Provident Fund (Amendment) Scheme, 2011 2) It shall come into force on the 1st day of December 2011. (3) The Public Provident Fund scheme is a statutory scheme of the Central Government framed under the provisions of the Public Provident Fund Act, 1968.

Subject to the provisions contained in section 16, the Employees’ Provident Funds & Miscellaneous Provisions Act., 1952 applies to scheduled establishments employing 20 or more persons. The establishments which are not coverable statutorily could be covered on voluntary basis if a majority of the employees and employer are willing. For the purpose of coverage, there is no criterion whether the establishment falls under organized or unorganised sector.

The finance ministry has notified rules which will pave the way for small savings account holders to earn higher returns from December 1. Earlier this month, the government had accepted the recommendations of a panel which would help investors earn higher interest on small savings schemes.An expert panel, headed by former RBI deputy governor Shyamala Gopinath, had recommended moving to a market-linked interest rate system for small savings schemes that would translate into higher returns for now.

Central Government hereby authorises the following 50 branches of Bank of India to receive, with immediate effect, subscriptions under the Public Provident Fund Scheme, 1968 and Senior Citizens Savings Scheme Rules, 2004:—

Ministry of Finance, Department of Economic Affairs (Budget Division)Government has vide its office memorandum No. No. 6-1/2011-NS.II (Pt.) Dated 11th November, 2011 announced increase in interest Rates on small saving schemes which includes interest rate on Public Provident Fund and other schemes. To address the issue of asset-liability mismatch in the National Small Savings Fund (NSSF), the central government has moved towards making returns from small savings instruments benchmarked against the government securities of similar maturities.

The Public Provident Fund is the darling of all tax saving investments.No wonder! You invest in it and you get a deduction on your income. Besides, the interest you earn on it is tax-free. Since it is a scheme run by the Government of India, it is also totally safe. You can be sure no one is going to run away with your money. Here, we summarise the scheme, tell you how to open a PPF account and what to expect.

Employees’ Provident Fund If you are a salaried individual, then this is probably the best investment product you have in your portfolio. Every month you park 12% of your basic plus dearness allowance in your account and your employer matches the in