PPF Calculator: Public Provident Fund (PPF) is one of the government backed small savings schemes that aims to provide assured returns at the time of maturity. Under Section 80C of the Income Tax Act, the PPF account holder can claim income tax exemption up to a maximum of Rs. ₹1.50 lakh invested in this scheme in a financial year. In addition, it is 100 per cent risk free and the PPF interest rate, which currently stands at 7.10 per cent, is also 100 per cent tax exempt.
According to tax and investment experts, the PPF account matures after 15 years of opening the PPF account. But, a PPF account holder can extend his PPF account beyond 15 years in a block of 5 years and the PPF account extension facility can be used for an infinite number of times. Hence, one can become a millionaire at the time of PPF withdrawal, if properly invested in one’s PPF account.
how to submit ₹1 crore in one’s PPF account; Sebi registered tax and investment expert Jitendra Solanki said, “To collect ₹1 crore in one’s PPF account, the account holder will have to withdraw his expenses ₹1.50 lakh limit in a financial year. In PPF account, one can invest for 25 to 30 years as between 25 to 30 years one becomes an earner and it takes time for the earner to be cautious about saving. So, 30 to 35 years is the stage when one becomes proactive about tax-oriented-savings.”
How to continue investing in your PPF account for such a long period; Manikaran Singhal, Founder, Goodmoneying.com said, “PPF rules allow account holders to extend their PPF account beyond maturity. But, in order to extend their PPF account, one needs to have a PPF account in the last year of maturity with the bank. The extension form has to be submitted. or the post office where one’s PPF account is present.”
Manikaran pointed out that the PPF account can be extended in blocks of 5 years and there is no restriction on the number of times one can extend the maturity of his PPF account. So, for the first time, the investor has to submit the extension form in the 15th year of PPF account opening and then every 5th year of PPF account extension.
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Assuming the current PPF interest rate of 7.10 for 30 years, the PPF interest calculator suggests that one is required to ₹1,08,000 annual investment in one’s PPF account. Since PPF allows an investor to deposit 12 deposits in a year, the PPF account holder can invest the same ₹1,08,000 in 12 monthly investments of ₹9,000 also. So, like mutual fund SIP, a PPF account holder can deposit ₹1 crore by investing only ₹9,000 per month for 30 years in one’s PPF account using the extension facility in 15th, 20th and 25th year of PPF account opening.
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