The Public Provident Fund or PPF scheme is a tax saving scheme, which was introduced by the Indian Ministry of Finance in 1968. This scheme offers many benefits for taxpayers. According to this plan, the deposit made in a PPF account can be claimed as a tax deduction and the interest over PPF amount is tax-free.
This scheme was specially designed to uplift savings among Indians for their retirement compilation. The Public Provident Fund initiate this scheme for the welfare of Indian citizen by inducing them about the habit of savings so that they can spend their life after retirement peacefully.
Earlier, Public Provident Fund account can be open only in post offices, but not now most of the private banks are also entitled to open PPF accounts for customers. The SBI is the most trustable bank of Government of India and they offer handsome interest over PPF account and assurance of safety too.
PPF Account opening Eligibility:
1. Only Indian citizen can open Public Provident Fund account
2. Opening a PPF account is very simple and only you need to fill one form and submit it with the KYC documents to the nearest Bank.
Documents required for opening Public Provident Fund Account:
1. PPF account opening form.
2. Attached your identity Proof like driving license, passport, PAN card and voter’s id.
3. Resident proof like electricity bill, PAN card etc.
4. Two self-attested passport size photographs.
How to Get Maximum Benefit from PPF Account, 8 Ultimate Tips:
The eight ultimate tips through which you can get maximum benefits from Public Provident Fund (PPF) account are:
1. PPF is helpful in income tax relaxation-
PPF account holders enjoy the income tax deduction under Section 80C of Income Tax. The main advantage of PPF account is that the interest over Public Provident Fund amount is totally tax-free
Any depositor of PPF can claim the relaxation of Rs.1.5 lakhs on their income tax. This fruitful scheme offers you many advantages in tax savings.
2. Benefits of PPF in Loans and Withdrawals-
The most vital benefits of PPF is that you can make partial withdrawals and take a loan on the behalf of Public Provident Fund account. This is just like your piggy bank in which you can deposit any amount of money and when you need money you can take a loan against PPF money and repay it later. Not only this, you can also make partial withdrawals of your PPF investment in every 7th fiscal year.
3. PPF account can also open for minors-
The most important benefits of PPF scheme is that now you can open PPF account for minor too. If you are a parent and wanted to save something for the future of your children then you can open a PPF account on the behalf of your child and keep investing for his/ her future. You can withdrawal the PPF money when you would need a money for your child’s studies or marriage. Not only this, you can also claim a tax deduction on this investments along with your own PPF account.
4. PPF is a Hassel-Free investment-
Public Provident Fund (PPF) is a government scheme which is designed for the welfare of Indian citizen. This scheme is very safe and secure and under this plan, you no need to take tension about your money.
5. PPF offers high Rate of Interest-
The main reasons why people choose PPF scheme against all other saving schemes is that it offers a high rate of interest over PPF amount. The interest rate of PPF is not fixed and every year it changes. But one thing that fixed is that every fiscal year PPF comes with the highest interest rate as compared to other investment schemes. The current interest rate of PPF is 8.7%.
6. Lock-In period In PPF-
Lock-In period is a special period in PPF, it is a 15 years duration in which you can not touch your investment money. After 15 years you can withdrawals your money with the interest amount. Most of the time people withdrawal their amount at some point because of no such limitations.
But, PPF scheme assures to invest your money for at least 15 years and take back the big amount and interest money. This is the reason that most of the parent open PPF account for the future of their children.
7. No specific eligibility In PPF account-
The best Advantages of Public Provident Funds is that there is no limitation and specific eligibility criteria in this scheme. Any Indian citizen, who belongs to income class can open PPF account in any private or government bank. You can also open PPF account in post offices. Only with Rs 500 and KYC documents you can open your PPF account.
8. PPF Benefits in deduction from Debt, Liability, and Wealth Tax-
The amount collected in your PPF account is eligible for tax deduction from any debt or liability that may be charged on your by the court. Even if a court has a doubt on you for any criminal offense then also PPF tax would remain untouched. The another fruitful benefit of PPF is that you don’t need to pay any wealth tax on your PPF account because it is totally free from wealth tax.