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 The entire balance can be withdrawn on maturity.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.

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Tags : Budget (1956) Budget 2014 (172) PPF (84) public provident fund (58)

0 responses to “FM Increases PPF Investment Limit in a year to Rs. 1.50 Lakh”

  1. PRAKASH ROY says:

    Though tax exemption limits upto 1.5 La/Annum in PPF, Can a person deposite more than 1.5 La/Annum in PPF ?

  2. 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

  3. reena says:

    Hi ,

    How much should I invest in ppf minimum if my earnings are 4 lac p.a ?to get tax benefit every year ?

  4. 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

    • O.P Gupta says:

      Mr vijay you can’t deposit more than Rs 1.5 lacs. Bank will not accept it. Even if accepted thru oversight you will not get any interest on that.

    • ananthan says:

      we cannot deposit more than 1.50 lakhs inn PPF account. Even if we deposit more than 1.50 lakhs the excess amount deposited will be returned or will be kept in suspense account

      • AMIT KUMAR JAIN says:

        I tried depositing more then 1.5 Lakh and bank returned my amount back to my account.

        Banks are not accepting amount more then 1.5 Lakh in PPF.

        All banks are not accepting extra amount in PPF.

  5. 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.

  6. O.P Gupta says:

    In 2015-16 you will have to deposit Rs 1.5 lakhs to get the benefit.

  7. sudarshana says:

    Yes; why doubt?!

  8. Jagmohan says:

    I have deposited 50k in september in ppf. Will I be getting the benefit of the same in 2015-16?

  9. sudarshana says:

    In case of PPF there is nothing like matching contribution and what we get is the tax free interest.

  10. 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.

  11. 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”.

  12. Vikram says:

    Now You can deposit additional 50K in SBI PPF A/c. It is getting successfully credited now!

  13. sudarshana says:

    One can lodge complaint online regarding this. One can register complaint online or call: +918287599333

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