CA Sandeep Kanoi

To increase household savings for the common man, the Budget 2014 presented by Finance Minister Arun Jaitley on 10th July 2014 hiked the PPF (Public Provident Fund) to 1.5 lakh per annum from existing Rs. 1 Lakh Per Annum. Investment in PPF qualifies for deduction under section 80C  and Similarly  investment limit under 80c has also been hiked by Rs 50,000 to Rs 1.5 lakh. Increase in PPF Limit been notified wef 20.08.2013 – Finmin Notifies revised PPF Investment limit of Rs. 1,50,000/

The public provident fund is established by the central government. One can voluntarily open an account with any nationalized bank,selected authorized private bank or post office. The account can be opened in the name of individuals including minor.

The minimum amount is Rs.500 which can be deposited. The rate of interest at present is 8.7% per annum, which is also tax-free. The entire balance can be withdrawn on maturity. Interest received is tax free. The maximum amount which can be deposited every year now is Rs. 1,50,000 in an account. The interest earned on the PPF subscription is compounded. All the balance that accumulates over time is exempt from wealth tax. Moreover, it has low risk – risk attached is Government risk. PPF is available at post offices and banks.

Tax Benefit from Investment in PPF 

Interest earned is fully exempted from tax without any limit. Annual contributions qualify for tax rebate under Section 80C of income tax. Contributions to PPF accounts of the spouse and children are also eligible for tax deduction. Balance in PPF account is not subject to attachment under any order or decree of court. But, Income Tax authorities can attach the account for recovering tax dues. The highest amount that can be deposited is 1,50,000 (please note that the limit has been increased from 1,00,000 to 1,50,000 in 2014-15 budget and the circular has been issued on 20th August 2014) Tax bracket for PPF is EEE (i.e. Exempt,Exempt,Exempt). So contribution is exempted under 80C, Interest earned is tax exempted and withdrawal is also tax exempted

One can withdraw the investment made in 1st year only in 7th year. However, loan against investment is available from 3rd financial year.

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Telegram

taxguru on telegram TELEGRAM GROUP LINK

More Under Income Tax


  1. kumar k says:

    dear sir,
    first time at a time 1,50,000 deposited amount in ppf account but ofter 15years how much amount got in plz give me answer

  2. vijay says:

    I want to depisit 2 lac in PPF each year. Can i do this or i can only deposit 1.5 lac each year.
    i think i can deposit any amount in PPF in a year however if my deposited amount exceeds over 1.5 lac i will get only benifit of 1.5 lac not more than this.
    please correct me if i am wrong. And post here detailed answer.
    and most important i am a government employee

  3. sudarshana says:

    Mr.Jagmohan, the limit of 1.5 lakh u/s 80-C includes the contribution towards PPF. You will have to add up all the contribution qualifying for benefit u/s 80-C and retrict the claim to 1.5 lakhs.
    You are free to depasit upto 1.50 lakhs to PPF account in a financial year.

  4. O.P Gupta says:

    Mr Venkata,
    You are confusing ppf with Epf. For epf no limit is applied except for the purpose of exemption u/s 80c. So don’t worry, whatever amount is deducted by your employer can be deposited in your epf account along with employers contribution without any limit.

  5. Venkat says:

    Is this annual 1L/1.5L limit just for employee contribution. Or is the limit applied on the amount after including the employer’s matching contribution?

    When the limit was 1L per year, my employer was deducting from my salary a *monthly* amount that (when multiplied by 12) exceeded 1L annually. How is that? If the EPFO was only accepting 1L max from employee contribution, where was the balance going? Swallowed by my employer? The question is even more severe if the limit applies to “employee+employer contribution”.

  6. ananthan says:

    I tried at SBI Malleswaram to make payment of Rs. 50000.00 to my PPF a/c but they refused to accept stating that there no circular from their HO. Then how long we have to weiht?

  7. Vijay Parimoo says:

    From when onwards we can pay additional amount of Rs.50,000/- in our PPF account…..SBI bank at Andheri East is not accepting yet this additional amount….Pls. Guide.

  8. sudarshana says:

    Mr Anshu:
    The point was depositnig in PPF after 5th of any month will entail loosing of interest for the whole month. PPF interest calculation is not like SB account. Sweep in can be activated with a rider regarding the minimum balance about which sweep in will be effected.

  9. sudarshana says:

    There is one bank which pays SB interest of 7% pa and for 50k for one month it is Rs.290/- and tax free too (upto 10k per year u/s 80-TTA). One need not have to remember and bank does that job. Give a standing instruction or fix a neft transfer to your PPF account (in any bank) (say 1st or 2nd Sept) for optimal returns. For a honest salary earner proper planning of his financial transactions is the only way to reduce the tax burden and enhance to usable income.



    Do not rush to deposit the extra 50,000 this month. The ppf account will pay interest only from next month as it takes into account the balance till 5th of a month. So if you deposit this month, you will loose the interest on 50,000 for this month and gain no interest in ppf account.

    Better to wait till 1st of next month.

  11. Amit Kumar Jain says:

    One pan card is having 1.5 Lacs limit whether it is your PPF account or your kids.

    if same pan card is used for your’s and your kids account then total limit for both account will be 1.5 Lacs in total.

  12. Shibashish says:

    I have a PPF a/c at SBI and i want to open a new PPF a/c as a guardian for my minor kid. Can i deposit Rs3 lakhs maximum in a year(Rs1.5 lakhs each on my PPF a/c and my kids PPF a/c)

  13. San Jalan says:

    Hi friends
    I tried to deposit additional 50k to my PPF account (SBI) via net banking but it is not accepting ….
    can some body please update from which date we can deposit additional 50k to ppf accounts. .

  14. s sudarshana says:

    Even if bank accepts, better to deposit after 2nd and by 4th so that you will get interest in your sb account and will not loose any interest in ppf account. PPF accounts will compute the interest based on the minimum amount between 5th and last date of the month.

  15. s sudarshana says:

    Now the President of India has given his ascent to the Finance Bill on 6th. now there will be gezette notification by the Govt Of India and based on that Finance Ministry will issue Circular/Office Memorandum based on which the Banks will issue Orders to it’s branches. On it’s receipt by the branch, the depositer can deposit upto 1.50 lakh!

  16. Ashok Sharma says:

    It seems government of India is very sensitive on the issue but system is applying break on its speed. Every body is waiting a notification to this effect immediately.

  17. s sudarshana says:

    Best thing to do is to deposit around 3rd or 4th in online transfer or on 1st if it is by cheque. By this way one can get interest upto that day in SB a/c and thereafter in PPF account.
    But the ideal is to put whatever one is contemplating to put in a year at the beginning, subjec to availability of funds as keeping in FD is getting interest only to pay tax on it at a later date.
    The general tendamcy to deposit for all tax saving instruments in the month of Feb of the financial year is not rewarding.

  18. s sudarshana says:

    The administration in the system is not very sensitive to the needs. it is said they are thick skinned. The promise that chane will come with the change of guard is still not seen. Millions of middle class section of the socitey are waiting for this Notification to come about. As rightly said the interest is gone!

  19. s sudarshana says:

    One has to wait for the President’s assent. Until the ‘online’ activities came they used to accept and not allow any interest if the deposited amount is above the permissible amount for the grant of exemption/otherwise. Your statement imply the ‘conditionality’ is incorporatd by SBI on it’s online transfer to PPF. One has to wait for the official notification and correction/changes in the software.

  20. D B Dandapat says:

    So failed to undersatnd, who is now accepting deposit of a max limit 1.5 L in PPF account as Mr Sundaram have posted today at about 10.06 AM.

  21. D B Dandapat says:

    Today while in contact with State Bank of India at about 11.30 AM, the maximum limit of deposit in PPF A/C yet to increase beyond 1.0 L as on date and time. No circular , SBI have received till now.

  22. Guru says:

    Does anybody know if SBI started accepting 50K additional deposit in PPF as on date, because when i did net transfer last week, it got returned back saying exceeded the limit?.

  23. R K Agarwal says:

    Govt of India Taxes changes are implemented immediately just after Budget but any changes in personnel TAxes implemented much after. Why this anamoly.

  24. s sudarshana says:

    Finance Bill is passed in both the houses of Parliament and gone to President for his assent. After this only Notification will be issued in this regard.

  25. D B Dandapat says:

    Banks are yet to accept the deposit of Rs 1.5 L on account of PPF for FY 2014 – 15. The date of publishing such Notification from ministry is awaited. How to get confirmation of the same.

  26. VENKAT says:

    Amit and others. I think only after the FINANCE BILL is passed in the parliament the Ministry will issue about expansion of PPF to the various PPF receiving institutions including the banks.

  27. Amit says:

    I deposited today but my payment got returned back to my account.

    I also spoke with bank manager and they says that still increment is not implemented.

    still limit is old one only. new limit is not set yet.

  28. Somnath PaulChoudhury says:

    On 11/7/2014 I posted this to the Customer Care thru online SBI

    Can I deposit/transfer NOW more 50000 in PPF to make this yearly contribution to 150000 or wait for few days more?

    This was their reply:

    We thank you for banking with us. We will update the PPF limit in Internet Banking portal as soon as we will get notification from Govt of India. For more detail, please contact your branch. We regret for the inconvenience caused.

  29. Shireesh Patil says:

    I tried to deposit more than Rs 1,00,000/- in my PPF account but SBI denied that the notification yet not received by them. Can any one hi-light on this? Or copy of notification for PPF limit hike up to Rs 1,50,000/-

  30. Rishi Raj Kumar says:

    Till 4 days ago SBI was not accepting deposits above Rs. 1 lac per annum through its IB. Maybe, we will have to wait till the finance bill is passed by the parliament.

  31. ANSHU NARULA says:

    When will the Notification reach Banks of enhancement of PPF limit to 1.5 Lacs and banks start accepting 1.5 Lac contribution

  32. Anshu Narula says:

    1Lac I have already deposited on 2nd April 2014 , Can I deposit this additional 50000 today or should I have to wait for budget to be passed and some notification to come

  33. Aruna says:

    I Have a query.Since PPF contribution increased to 1.5lacs per annum, from FY 2014-15, 80C deduction increases from 1lac to 1.5lac’s.
    My Doubt is,
    Even if we have less amount(below 1.5 lac’s) of contribution in PPF, and say having higher amount of deduction of housing loan principal, Shall i claim 80C as 1.5 lacs???
    Pls clarify.

  34. Nagma Saifi says:

    Please make it clear that the investment made by you is being done on or after 1st April’2014 (i.e for financial year 2014-15)

    If it is so then you can further invest Rs 50,000/- in PPF as the deduction amount is now enhanced to Rs 1,50,000/- which will be applicable from the F.Y. 2014-15.

  35. Nagma Saifi says:

    ndividuals who are residents of India are eligible to open their account under the Public Provident Fund scheme. A PPF account may be opened under the name of a minor by his/her legal guardian. However, each person is eligible for only one account under his/her name.

    Non-resident Indians (NRIs) are not eligible to open an account under the Public Provident Fund Scheme. However a resident who becomes an NRI during the 5 years’ tenure prescribed under Public Provident Fund Scheme, may continue to subscribe to the fund until its maturity on a non-repatriation basis. Deposit to PPF is tax deductible for individual assessees in India u/s 80C of Income Tax Act, 1961.
    Hope i have cleared your doubt.
    @ Mahesh masuria.

  36. Pankaj says:

    Increasing PPF limit is a good move. More expectation from FM for BPO Industry where maximum no. of youth are working. Also both employee and employer contribution are part of employee CTC. So there is no major relief from inflation as companies are reducing cost day by day.

  37. mahesh maisuria says:

    May i get reply from you that i am 60. I til no ppf a/c.can i open it or not?
    Thank you
    Yours faithfully
    Mahesh maisuria

  38. s sudarshana says:

    The increase in the PPF contribution eligible for rebate should have been, i.e. Rs.50,000, exclusively and not a part of rise from 1 lakh to 1.5 lakh. It is good on paper and for publicity.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

November 2021