Public Provident Funds Fully Tax Free-Know the Details-
If you want to invest your money keeping in mind the long term plans and a very attractive interest rate then this is for you. The returns from PPF is fully tax free .One can also avail the facilities of loans , withdrawal and extension of his / her PPF account . Even guardians on behalf of minor can open PPF account . One can deposit money in PPF as a lump-sum amount on 12 easy installments . Even your lenders can not attach your account . Even a court can not order attaching of PPF accounts .
The very important Details about PPF you must know:-
(1) A Good Interest Rate:- everyone’s concern is a good interest rate . So is 7.6 per cent per annum. This even slightly more than some fixed deposit interest rates.
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(2) Payment of interest Amount:- Interest on PPF deposit is paid on march 31 every year . Important thing is that they calculate interest for a month on the minimum balance available in the account from the fifth of a month to the last date of the month. So you have to ensure that you deposit money in account before 5th of a month , otherwise you might lose a big amount of interest benefit.
(3) Income Tax Exemption:- The income earned as interest is completely tax free. It means that the contribution , interest income and maturity proceeds on PPF accounts all have zero taxes.
(4) What is the maturity period :- A PPF account matures in 15 years . However it can be future extended with in one year of maturity for future five years and so on.
(5) Can We Close an Account Before Maturity :- Premature closure is not allowed before the period of 15 years .
(6) Premature Withdrawal:- Yes allowed but after completion of at least 6 years that means from 7th year onwards.
(7) Can We Get Loans Against PPF Accounts :- Yes we can avail loan facility againest PPF accounts but from 3rd year onwards .
(8) Limit On Maximum Investment :- One can deposit from minimum amount that is 500 to 1, 50,000 a year . More then that is not allowed .
(9) Where to Open :- It can be opened in bank branch or even a post office . Some banks allow opening of PPF accounts online .
(10) Can we have a Nominee:- Yes, at the time of opening the account or after opening the account .