Tax Saving – Public Provident Fund ( PPF)

P.P.F. Account is a LONG TERM SAVING INSTRUMENT provided by the CENTRAL GOVERNMENT, came into force from 1 July 1968. This investment gives us ASSURED RETURNS & PROVIDE OLD AGE INCOME SECURITY TO EVERY ONE. By investing in P.P.F Account we can see the POWER OF COMPOUNDING in the long run. This account is under the E.E.E regime of income tax.

FEATURES

WHO CAN – Any person – resident, above 18 years of age, Minor through Guardian. ELIGIBILITY 

Who CAN-NOT –  Non-Resident, H.U.F, Foreigner.

ENTRY AGE

No Age Limit for A/c opening

INVESTMENTS

MINI – 500 P.a.

MAX – 1,50,000 P.a.

(There is no limit on number of deposits in the account).

INTEREST-

7.1% Compounded annually.

TENURE

15 years, on completion of 15 years the account can be extended to 5 years at a time

Account holding category-

1. Individual.

2. Minor through guardian only one account can be opened for each person.

DOCUMENTATION

1. Proof of Identity

2. Proof of Address

3. Passport size photographs

4. And a Account Opening Form.

OPENING

P.P.F account can be opened at any nationalized bank & post office.

By submitting form 1 along with relevant documents.

Only one account can be opened in the name of individual, or can open in the name of minor of whom he is a guardian of.

EXTENSION OF P.P.F ACCOUNT

The account holder may opt to continue even after the expiry of 15 yrs.The extension can be taken in blocks of 5 years can be continued with or without deposit. Extension can be done within 1 yr of maturity date of account opening.

WITHDRAWAL

50% withdrawals are allowed any time after expiry of 5 years from the end of the year account was opened.

Withdrawal facility is available once a year.

If loan taken against P.P.F then have to repaid before withdrawal request.

PREMATURE CLOSURE

Premature closure is allowed for –

1. Treatment of life threatening disease of holder, spouse or children

2. For higher education of account holder/children

3. Change in residential status.

CLOSURE

Account closes in event of death of holder & no nominee shall be allowed to continue.

In other case withdrawal can be done after expiry of 15 years.

LOAN AGAINST P.P.F

The account holder may apply for loan against P.P.F account.

Loan can be applied between 3rd – 6th financial year of account opening with interest @1%.

Penal interest of 6% p.a. shall be charged.

Loan can be repaid in installments or lump sum.

BENEFITS

Attractive long terms goals – These account serve long term investment goals,

Deposit period –  15  years

Lock in period – 5 years

Useful for retirement planning-  Long tenure, Tax Benefit, Capital Protection makes it ideal for Retirement Corpus.

Tax free units- Tax free interest, withdrawals and tax- deduction investments

Low Risk- There is Minimum Risk of default.

Easily Accessible- A/c can BE opened at nationalized, public or private bank, post office

No Attachment- Cannot be attached under court order or laid claim to by creditors.

NOTES -:

A person can hold only one A/c in his name.

No interest will be credited if the A/c is in-active/ dormant.

Tax benefit (1.5 lakh) allowed if the contribution is made in spouse or minor child P.P.F A/c.