PPF Tax Saving: Public Provident Fund ie PPF is such a great way of investment, in which you get good returns, as well as tax exemption.
This is an investment falling in the EEE category, that is, there is no tax on investment, interest and maturity amount. You get great interest on investment in PPF as well as tax exemption on investments up to Rs 1.5 lakh per annum. This is the reason why people are worried about investing in PPF. But you can also get more profit from this investment. If you keep some important things in mind before investing in PPF, then you will be in profit.
Investment limit in PPF will be doubled
Investors in PPF not only get assured returns, but also get income tax exemption under Section 80C of Income Tax on investments up to Rs 1.5 lakh. Many times it also happens that even after the limit of PPF investment is over, the investor is left with money and he is looking for investment options. According to tax experts, if the investor is married, then he can open a PPF account in the name of his wife or husband and invest Rs 1.5 lakh separately in it.
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These benefits are available on investment in PPF
According to experts, if you open a PPF account in the name of your life partner, then the limit of PPF investment will also double, although even then the income tax exemption limit will still be Rs 1.5 lakh. Even if you get 1.5 lakh income tax exemption, but it has many other benefits. PPF investment limit doubles to Rs 3 lakh. Being in the EEE category, the investor gets tax exemption on the interest and maturity amount of PPF.
These provisions have no effect
Income from any sum or gift given by you to your wife will be added to your income under section 64 of Income Tax. However, in case of PPF which is completely tax free on account of EEE, the provisions of clubbing have no effect.
Great trick for married people
In this, when your partner’s PPF account matures in future, then the income from your initial investment in your partner’s PPF account will be added to your income year after year. Therefore, this option also gives married people a chance to double their contribution in the PPF account. This is a better option especially for those people who want to take less risk and do not want to make market linked investments like NPS, Mutual Funds, where the risk appetite is high. Let us tell you that the interest rate of PPF has been fixed at 7.1% for the July-September quarter.
