PPF Account: Rate of interest for withdrawal. 10 rules investors should know

We list down 10 important rules that are important for a PPF account holder:

1]PPF Interest Rate: At present, the interest rate of PPF is 7.10 percent. PPF interest is calculated on monthly basis but compounded annually.

2]PPF Interest Calculator: PPF interest is paid on the minimum available PPF account balance between the 5th of the month to the last date. So, if a PPF account holder makes deposits from 1st to 4th of the month, the investor is also eligible for PPF interest for that month. Hence, it is advisable for monthly PPF investor to invest from 1st to 4th of the month whereas for lump sum annual depositors, they should deposit from 1st to 4th April and get PPF interest for the entire financial year on their deposits. should do.

3]PPF Deposit: A PPF account holder has to deposit at least 500 in a financial year to keep your account active while any investment above PPF interest rate will not be available on surplus deposit of Rs 1.5 lakh in a financial year. That is, the minimum deposit that the PPF account holder can make is 500 to max 1.5 lakh in one’s PPF account.

4]PPF Account Rules: An individual can have only one PPF account and opening of joint account is not allowed in case of PPF account.

5]PPF Withdrawal Rules: A PPF account holder can fully withdraw the PPF account balance only on maturity i.e. after completion of 15 years. However, in case of financial emergency, the scheme allows partial PPF withdrawal from the 7th year of account opening. Premature withdrawal is allowed after completion of 4 years of PPF account opening.

6]Income Tax Benefits: Any PPF deposit above as mentioned above 1.50 lakh in a financial year is neither eligible for PPF interest rate nor for income tax exemption. As per Section 80C of the Income Tax Act, up to a PPF deposit 1.50 lakhs can be claimed for income tax benefits in a financial year. This tax benefit has to be claimed under section 80C while filing Income Tax Return (ITR).

Similarly, PPF maturity amount is 100% tax free at the time of withdrawal.

7]How to Activate PPF Account: failed to make minimum deposit 500 in a financial year freezes the PPF account. There is a penalty for activating PPF account 50 per year account freeze.

8]Protection against bankruptcy: A person cannot attach a PPF account to repay a loan, not even by a court order.

9]PPF Account Detail: On completion of the maturity period of 15 years, the account holder can extend his PPF account unlimited times in blocks of 5 years.

10]Loan Against PPF: An account holder is eligible for loan against PPF account between the third and fifth year of account opening. For the second year immediately preceding the loan application year, the maximum loan amount can be 25 per cent.