Investing In PPF
How to get the most benefit from investing in a PPF account? This is the most discussed favourite question of PPF investors. Investing in Public Provident Fund (PPF) is a risk-free and high return generating option. Among Indian citizens investing in government-backed schemes is a very popular trend offering guaranteed steady returns.
If you want to enjoy all the perks and benefits of a PPF account then you should aim for disciplined deposits. By not skipping the deposits and following the rules a person can generate a lot of wealth at the time of maturity.
PPF Enjoys Tax Exemptions
PPF is among one the very few investment schemes that seek the perks of triple tax exemption by the government. Triple tax exemption is represented by Exempt-Exempt-Exempt (EEE) status making your deposits and maturity amount tax-free.
A person gets tax exemption till the deposits of ₹1.5 lakh in his PF account per year. This means for your investment to be taxed free you can deposit the maximum amount of ₹1.5 lakh a year in a PPF account. A person can choose to deposit annually or monthly, but cannot exceed the above amount in a year.
How To Get Most Benefit From PF Account?
To get the most out of your PPF investments, you should always look forward to opening the account between the 1st and 4th day of any month, preferably April. And not only to open an account you can choose these dates for your deposits as well.
You must be wondering why to open an account on these dates? It is noticed that if an account is opened between April 1 and April 4 the account holders always receive the maximum interest amount in a fiscal year. Let me also tell you that if the account is opened after April 4th then from next month the interest will be calculated, meaning from May.
As per PPF rules, “The interest shall be calculated for the calendar month on the lowest balance in the account between the close of the fifth day and the end of the month. This interest is credited to the PPF account at the end of each financial year, which is tax-free under the Income Tax Act.”