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PPF (Public Provident Fund): Features & Eligibility

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Hiral Vakil

PPF
PPF Features
Section 80C

Warren Buffett once said, ‘Only buy something that you’d be perfectly happy to hold if the market shut down for ten years.’ Regular and systematic savings is the key to wealth creation. Public Provident Fund is a long term investment option for investors searching for safe financial instruments. It comes with the dual benefit of tax saving and wealth accumulation. PPF is backed by the government and hence scores high on safety.

Want to know what other tax deductions you can claim?
Read our article to understand the different types of tax deductions available to you and how to avail them.
Read More
Want to know what other tax deductions you can claim?
Read our article to understand the different types of tax deductions available to you and how to avail them.
Read More

What are the features?

Want to open a PPF account?
Here is a step by step guide on how to open a PPF account.
Read More
Want to open a PPF account?
Here is a step by step guide on how to open a PPF account.
Read More

Who can invest in PPF?

An individual can invest in PPF. The minimum investment amount is Rs 500/- and the maximum amount is Rs 1,50,000/- for a year. It is suitable for freelancers and proprietors. Deposits made under PPF qualify for deductions under Sec. 80C and interest earned are tax-free. 

Want to know what 80C covers?
Read our article here to see all the deductions you can claim under this section and reduce your tax liability.
Read More
Want to know what 80C covers?
Read our article here to see all the deductions you can claim under this section and reduce your tax liability.
Read More

FAQs

Is interest on PPF taxable?

No. The deposits fall under the EEE (Exempt, Exempt, Exempt) tax category. This means that:
– Deposits made under PPF scheme are allowed as deduction under section 80C.
– Interest earned on these deposits in exempt from tax; &
– Amount withdrawn from the PPF account is also exempt from any tax.

How many PPF account can I open?

You can open one PPF account every 15 years. However, at any given time, you can only have one account in your name.

Can I have both EPF and PPF account?

Yes. It is plausible for an Individual to have an EPF and a PPF account at the same time.

Got Questions? Ask Away!

  1. Hey @sushil_verma

    There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.

  2. Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.

    For eg,

    • Medical allowance is exempt up to INR 15,000 on a reimbursement basis.
    • Children education allowance is exempt up to Rs. 200 per child per month up to a maximum of two children.
    • Conveyance allowance is exempt up to a maximum of Rs. 1600 per month.

    Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.

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