What is PPF account | how to use it | interest of a PPF account | How to open PPF account | Maturity Period how a PPF account | PPF OwnershipPublic Provident Fund (PPF) is considered the best option in terms of investment in the country. This is the preferred option especially for people employed. The reason for its being popular among the people is its ever-increasing interest rate and tax-free returns. In the year 2018, interest is being paid at a rate of 7.6 percent, which is much higher than other investment options available in the market.
Maximum and Minimum Contribution: According to the rules of the PPF, the minimum investment limit in this option is 500 rupees. Its maximum limit goes up to 1.5 lakhs. This is the country's most affordable Fixed Deposit Scheme. Remember, on an annual basis, you can not invest more than 1.5 lakhs in it. You can contribute 16 times during the entire tenure on a yearly basis in this scheme.
Determination of Maturity Period:Most investors remain confluent about the maturity date of PPF. As this is an investment made for the lock-in period of 15 years, its maturity date cannot be calculated from the year or month of account opening. According to the rules of the PPF, it is decided at the end of the financial year in which initial investment is done. For example, if you have opened your PPF account on March 18, 2012, your maturity period will be 1 April 2028. Here the period of maturity will be counted from March 31, 2013.
The convenience of the loan and partial withdrawals during tenure: As the PPF account comes with 15 years lock-in period. But still, it offers partial withdrawal from the fund. However, note here that the availability and withdrawal of the loan are subject to certain conditions, such as the PPF balance and how many years your account has completed, etc.
PPF Ownership:Investors are also confused about how the ownership of the PPF account is determined. Keep in mind that in the event of a child is a minor, his parents/father can open it in his name and here the owner of the account will be held by two people. Keep in mind that grandfather or grandmother cannot be considered a guardian and cannot open an account in the name of the child. However, it can be done in the event of the death of both the mother and father of the child.
Taxation: As the PPF account comes in the Exit-Exit-Exit category, there is no clearance before the lock-in period before it is out of the purview of tax. However, during the filing of ITR, you have to mention that you have withdrawn from the PPF account.