The Public Provident Fund is the darling of all tax saving investments.  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.

PPF refers to Public Provident Fund and is a Long Term Debt Scheme of the Govt. of India on which regular interest is paid. Any Individual (whether Salaried or Self-Employed or any other category) can invest in this scheme and can earn a handsome tax-free return on the same which is usually higher than the return offered by Banks on Fixed Deposits.

1. Where You  can open a PPF Account and How?

a. To open a PPF account, drop  by a State Bank of India branch. SBI’s subsidiary banks can also open accounts. A list of these subsidiary banks is available on the bank’s Web site.You can even visit the nationalised bank in your neighborhood. Selected branches of nationalised banks can also open accounts.The head post office or selection grade sub-post offices also open PPF accounts.

b. You will have to fill up a form. You can take a look or download the form from SBI’s web site. Along with the form, attach a photograph and submit your Permanent Account Number. If you do not have a PAN, then furnish an attested copy of either your ration card, voter’s identity card or passport. When you open an account, you will be given a passbook (just like a bank pass book) in which all subscriptions, interest accrued, withdrawals and loans are recorded.


Image courtesy of Mister GC at

2. Who can and who cannot not open PPF Account?

a. Who Can Open PPF Account – Any Individual (whether Salaried or Self-Employed or any other category) can invest in this scheme. HUFs are no more allowed to open any PPF account

b. Who Can Not open PPF Account- NRI’s are not allowed to subscribe to PPF Account. However, if someone opens a PPF Account while he is a Resident of India but subsequently becomes a NRI, he shall be allowed to continue investing in his account.  An NRI can  invest up to Rs 1,00,000 per financial year in an existing account, that is, an account that he opened prior to becoming an NRI. If someone  inadvertently opened an account after becoming an NRI, it is best to close it before it comes to the attention of the concerned authorities in India.

3. You can have only one PPF account in your name

You can have only one PPF account in your name. If, at any point, it is detected that you have two accounts, the second account you have opened will be closed, and you will be refunded only the principal amount, not the interest. What if an Individual have two PPF Account in his/her name?

4. PPF Account cannot be opened Jointly with another individual

4. You cannot open a joint account with another individual. The account can only be opened in one person’s name. You are free to nominate one or more individuals. On the death of the account holder, nominees cannot keep the account going by making contributions. If there are no nominees, the legal heirs get the money. You can open one account for yourself and others for your child/ children. But, on your death, your children cannot make any additional contributions.Regularisation of PPF accounts opened in Joint names

5. Minimum and maximum deposit limit for PPF

A minimum deposit of Rs. 500 must be made during one whole financial year. The maximum that could be deposited is Rs. 1,50,000 in a financial year.  The interest you will earn is currently wef 01.01.2018 is 7.60% per annum (compounded yearly).  Deposits could be in either one go, or in flexible installments (in multiples of Rs. 100). You could vary the amount and the number of installments, as per your convenience, provided you do not exceed 12 installments in one financial year. Failing to deposit the minimum requirement, would lead to your account being discontinued. Interest would however continue to accrue. You could regularize the account again on paying the prescribed default fee along with subscription arrears.FM Increases PPF Investment Limit in a year to Rs. 1.50 Lakh

6. Continuing PPF after the 15 year period

  The PPF account is valid for 15 years. The entire balance can be withdrawn on maturity, that is, after 15 years of the close of the financial year in which you opened the account.  Once your account expires, you can open a new one. The only limitation is that you cannot withdraw it until seven years are completed, after which 50% of your deposits can be withdrawn, if needed.How to extend PPF account beyond 15 years

PPF account holders have an option of extending their accounts after the 15 year tenure with or without further subscription, for any period in a block of 5 years. The balance in the account will continue to earn interest at normal rate as admissible on PPF account till the account is closed. In case the account is extended without contribution, any amount can be withdrawn without restrictions. However, only one withdrawal is allowed per year.

If you continue the account after 15 years, with continued deposit, withdrawal up to 60 per cent of the balance at the beginning of each extended period (block of five years) is permitted.

7. Deposit date in payment of PPF by Cheque

In case of PPF account money deposited  by means of a cheque or demand draft, the date of encashment / Realisation  of the cheque or demand draft will be treated as the date of deposit. This issue becomes particularly relevant in respect of deposits made towards the end of the financial year by cheque / demand draft because if the same is not realised by March 31, then the same will be treated as deposits for the following financial year. This would also have ramifications in respect of the tax deduction being claimed by the individuals in a particular tax year. PPF Circular clarifying regarding reckoning of date of deposit

8. Opening a PPF account for a minor 

Under PPF scheme, an individual may on his own behalf or on behalf of a minor of whom he is a guardian, open a PPF account. Further, either father or mother can open PPF account on behalf of his / her minor child, but both cannot open the account for same child. Instructions on opening of account for minor

9. Loans on PPF Account

Loans can be availed from the 3rd financial year excluding the year of deposit. Amount of such loans must not exceed 25 percent of the amount that stood to the account holder’s credit at the end of the second year immediately preceding the year in which the loan is applied for.

A fresh loan is not allowed when a previous loan or interest is outstanding. Interest is charged at a rate of 2% if repaid within 36 months and at 6% on the outstanding loan after 36 months. The repayment may be made either in lump-sum or in Installments.

10. Benefit of Investing in PPF – Taxation of PPF

a. Benefit u/s 80C – The Investments made in PPF Account are eligible for deduction u/s 80C

b. Tax Free Interest – No Tax is payable on the Interest Earned on PPF Account.

11. Premature withdrawal from PPF

The entire amount in your account could be withdrawn only on maturity. However, in times of financial crises partial withdrawals are permitted subject to certain ceiling limits. You could withdraw once a year, from the 7th year onwards. Such withdrawals, must not exceed, 50% of the balance at the end of the fourth year, or 50% of the balance at the end of the immediate preceding year, whichever is lower.Tax effect in case of premature closure of PPF Account

12. Pre-mature closure of a PPF account is permissible only in case of death.

The Interest Rate of PPF is decided by the Govt. The Current Interest Rate on PPF is 7.60%. The Interest is computed for a calendar month on the basis of the lowest balance in an account between the close of the 5th day and the end of the month and the Interest is credited to the account of the account holder at the end of the year.

13. From which account can an NRI invest in the PPF account?

An NRI can use funds in the NRE account or the NRO account to make investments in the PPF account. It is important to remember that the PPF rules require you to invest at least Rs 500 per financial year in the PPF account. If you fail to make the minimum investment in a year or years your account will be considered dormant. Subsequently, when you want to revive the account, you would need to invest Rs 500 for each year that you missed plus pay up a penalty of Rs 50.

14. What happens on maturity of PPF Account of NRI?

If you are an NRI at the time the deposit matures, you would need to withdraw the balance. An NRI is not eligible for extension on the PPF account. What happens if you leave the account unattended past the maturity date? “In such cases the account will be considered ‘extended without contribution’ in blocks of 5 years for an unlimited period of time. Extended without contribution means that the NRI will not have to make the minimum yearly investment of Rs 500. His account will continue to earn interest at the prevailing rate. According to the PPF deposit rules the extension can be made for an unlimited period of time.

15. What are the differences and similarities between the National Savings Certificate (NSC) and PPF?

National Savings Certificate (NSC) Public Provident Fund (PPF)
Interest Rate: 7.60 %, compounded annually but payable on maturity(wef 01.01.2018) Interest Paid: 7.60 %,(wef 01.01.2018)compounded annually
No monthly/yearly payments No monthly/yearly payments
Minimum investment: Rs 100 and in multiple of Rs 100/-

Maximum investment: No Limit

Minimum investment: Rs 500 (required annually)Maximum investment: Rs 1,50,000
Duration of investment: 5 years for NSC VIII Issue Duration of investment: 15 years
Can be used as a security for mortgage and other purposes Cannot be used for such purposes
Tax benefit under Section 80 ‘C’ available.Maximum limit: Rs 150,000 Tax benefit under Section 80 ‘C’ available.Maximum limit: Rs 1,50,000
Good medium-term investment option Good long-term investment option
Interest accrues annually is taxable under Income From Other Source and is deemed to be reinvested and therefore allowed as deduction u/s 80C Interest is fully Exempt

Do consider opening a PPF account if you do not have one. You can put in as little as Rs 500 a year to keep it going.

16. Only the person actually depositing the PPF amount gets section 80C benefit

This means if your spouse deposits any amount into your PPF account, you will not be able to claim the deduction benefits under section 80C. Infact, your spouse will be able to (rightfully) claim section 80C deductions on his/her income.

17. You cannot claim section 80C deductions for any amount deposited by you into PPF account of your parents’ or siblings’ accounts

While tax laws allow you to claim 80C tax benefits for deposits into your spouses account, the same rule does not apply to your parents, siblings or relatives.

(Republished with amendments)

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More Under Income Tax


  1. Devang Modi says:

    I have transferred my PPF account in between year from one Bank to other bank.
    Now I didn’t see interest credited in PPF account for this financial year.

    Whom I need to contact ?

  2. Narayanan says:

    I have opened a PPF & SSY(for my child), I want to know what is maximum amount (Rs,150000) to be invested in each avenues and the number of instalments should be 12 is applicable or not

  3. RISHI SAXENA says:

    I am a seafarer working on foreign going ships for purpose of employment.My residential status changes year to year as per my stay in india(<182days).
    I also pay tax,for the financial year in which NRI time is not completed.

    My question is –
    1.) Can i open PPF account ?
    2.) If answer to 1.) is NO, can i open it for my minor child ?

    Thanks .
    Appreciate your valuable suggestions.

  4. N. Desai says:

    After my father’s demise on February 2018, my mother received his PPF proceeds. My mother is a family pensioner now, hence ITR 1 needs to be filed. My query is – Where should this be shown as exempt income in the ITR 1? There is a section that gives the following options to choose. Section 10(11) and Section 10(12). My understanding was that this applied to own account maturing. Can I use this option to show these proceeds as well? Or is there any other option?

  5. gokaraju says:

    Under What section or sub rule of Income Tax Act, The interest earned on PPF account is eligible for Tax exemption, Please clarifyany circular, section, rule, etcc is available plz share

  6. dr sunil b mundada says:

    sir if any attachment by any departmnet ppf account canot be attaced as it is provison for retiment pleas elobrate withe case laws

  7. Bhadkamkar Avinash Vishnu says:

    Is interest on deposit amount credited on daily basis as in case of savings account or it will be credited for a month if the deposit is made before certain date say 5 or 10? Please clarify.

  8. A. kumar peer says:

    please explain tax liability effect of selling M.F. units, say on 1.9.18, where LTCG is say 2.00 lakhs and ppf investment of 1.50 lakhs..


    information shared is very helpful but teher are alck of showing section for intrest on PPF account which is exempted
    so pls mention d same

  10. KA says:

    Sir can please elaborate about taxability of PPF interest.?

    Which section in Income tax Act gives exemption on PPF, PF interest earned?

    up to what % of interest is exempt?

    please clarify me with all the relevant sections

  11. S.K.JAIN says:

    My father in law was a super senior resident. He expired on 1.7.2017. He made an investment of Rs.150000.00 in PPF in early April 2017. Now in his IT return for Asstt. Year 2018-19 80-c of Rs.1.50 lakh investment will be available or not.
    PPF a./c was closed in Sep., 2017 by Legal Heir.

  12. R Kesavan says:

    I have a PPF account in bank opened on 19 March 1998.
    After 15 years it was extended for another 5 years on 6 Nov 2013. I have been depositing and using it for 80C benefits for all these years.
    I have deposited again on 28 May 2018 for FY 2018-19, before extending it. The deposit has been accepted.
    Can I now give form H for extension of another 5 years?
    What are the implications?

    May I request you to please clarify
    R Kesavan

  13. Akanksha says:


    Can NSC be purchased online? If yes then can you please suggest how?
    I read somewhere that w.e.f 2016, NSC and KVP is issued in e-mode or passbook mode rather than physical form.

  14. Hasmukh Gandhi says:

    I have PPF a/c since 1977. I am regularly deposits the subscrption since then. Interst on the the amount being exempted I am not showing the same under ” exempted Income ” is it correct on my part not show the same in I.T.Return?

  15. shilpag23 says:

    I’m a senior citizen housewife, and never filed any income tax return since had very low income (less than a lac). This yearI got some income (almost Rs 4 lacs). I don’t have PPF account so I invested Rs 1.5 lacs in my najor child’s PPF account.Can I claim income tax deduction of Rs 1.5 lacs under seciton 80 C (my child is not going to claim that PPF amount under her 80C).

  16. aditaya bansal says:

    i got 30 k salary after paying tax via TDS and out of 30 k i invested 5k per month in PPF @ 12 installments so total amount invested is 60k. As per rule in PPF account we do not pay tax on the invested amount but in my case i paid tax already. how i can got tax benefit on my invested amount?
    plz clarify

  17. anil kumar singhal says:

    prime minister announced on 15.aug 2016 that a person can withdraw the whole ppf fund for marriage expenses i have account with sbi pl tell me what is the scheme

  18. Anil Gupta says:

    I have a PPF account in the name of my daughter. I contribute for the same from my account. Can I avail tax benefit for the same. I do not have a PPF account in my own name. My daughter is 21 years and dependent on me.

  19. SYED WASEEM Pasha says:

    I have opened PPF account in the current financial year, can I use this for my TAX deductions for filling IT returns of the 2016-17 Assessment year

  20. manish says:

    interest received on bank ppf account is tax free, which we can not able to withdraw from the ppf account for 7 years. can the amount of interest is eligible as new investment in ppf and can we able to claim it under 80c deduction?
    for ex. I have received interest of rs.25000 on 31/3/2014, in fy 2013-14, I paid 75000/- new investment in ppf a/c.. then for the fy 13-14, for which amount I am eligible for 80c deduction? 75000/- or for both 75000/-+25000/-=100000/-


    I have an PPF account opened on 31/03/2000. I have deposited the subscription for the year
    2015-16 on 25/03/2016. But when I visited the bank on 10/04/2016 for PPF pass book entry, they returned the amount and asked that I have not extended the tenure of my account.
    Now what are the options left for me? I want a PPF account for tax savings.
    Can I continue the same account to get tax free interest till the account is not closed and open a new PPF account for tax saving purpose.
    Please suggest.


    I have an PPF account opened on 31/03/2000. I have deposited my subscription (By cheque) for the year 2015-16 on 25/03/2016. When I visited the bank on 10/04/2016 for PPF pass book entry, they returned the amount and asked me that I have not extended the validity of my PPF account.
    Now what are the options left for me? I want to continue my PPF account.
    Can I continue the same PPF account to get tax free interest till the account is not closed and open a new account for tax saving purposes.
    Please suggest.

  23. Deepmala Mukherjee says:

    I have transferred money from my joint saving account (with my mother) to my PPF account and accounts department is saying that i will not get the tax benefit on PPF. Pls suggest.

  24. Birendra Choudhary says:

    Refer your Article:

    Scenario 2

    In the second scenario, the mother has one self-PPF account and opens two other accounts to her two children respectively. Therefore, she manages three PPF accounts. At this stage, she can claim a maximum tax benefit of 1.5 lakh under Sec 80C of the Income Tax Act. Moreover, she will have to invest a maximum of one lakh in all the three accounts.

    my Question is : Why she will have to invest maximum of one lakh in all three accounts when permissible investment is one Lakh fifty thousand per year.

    Question No.2: I have two sons, 4 years and 2 years old respectively. Can my wife open PPF accounts in both’s name. I mean 2 separate minor accounts ? she doesn’t have any PPF account till date in her name.

  25. ksunshine says:

    Hi I already have housing loan that exhausts my 80C exemption. Can I still invest in ppf (upto 1.5L) to get tax free interest or will my interest be taxed or am I not allowed to invest in ppf at all? I understand that I cannot have use this amount under 80C exemption.

  26. Pranay says:

    You can take exemption under 80C of Income Tax only on the PPF account opened on either Your name or on your Child/Children’s name but the Max Qualifying amount is restricted to RS 150000 per year.

  27. Pranay says:

    NRI’s are not allowed to subscribe to PPF account. However if someone opens a PPF account while he is a resident of INdia but subsequently becomes NRI he shall be allowed to continue investing in his account , An NRI can invest up to 100000 Rs per Financial year in an existing account that is an account that he opened prior to becoming an NRI. If someone inadvertently opened an account after becoming an NRI , It is best to close it before it comes to the attention of the concerned authorities in INdia

  28. Pranay says:

    1. No you can open a PPF account only on your own name or your Childrens Name and not on wifes name.
    2. yes you can
    3. no, The Interest earned on a PPF account is Completely Tax Free
    4. after a period of 15 years your PPF account will be Matured and you will be eligible to Extend the period to a further 5 Years Block or close your account and withdraw the amount along with Interest.

  29. Pranay says:

    You can claim only the amount you have deposited into your PPF account, hence the interest on your deposits will not be allowed as exempted.

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