INSUBCONTINENT EXCLUSIVE:
If you want to avail loan on PPF accounts, you can do so after the third financial year.Interest rates on PPF accounts have yet again been
left unchanged at 7.6 per cent for the July-September quarter
PPF or Public Provident Fund is a government-backed instrument that offers fixed yields
There is no risk involved
A PPF account matures in 15 years
Since the PPF has a long tenure of 15 years, the impact of compounding is huge, especially in the later years, say financial planners
quarter ending September 2018 is fixed at 7.6 per cent per annum
The interest on PPF accounts is compounded yearly, which means that it is added to your principal amount every year
1,50,000 under Section 80C of Income Tax Act, 1961
One of the reasons for this is that the tax benefit it offers comes under the EEE (exempt-exempt-exempt) tax status
This means that at the investment, the interest earned, and proceeds received at maturity are all tax-exempt or free.3) If you want to avail
loan on PPF accounts, you can do so after the third financial year and this facility is available till the fifth financial year
The loan can be taken once a year.4) Partial withdrawals are permissible from PPF accounts every year from the seventh financial year
onwards from the year of opening of account
However, only 50 per cent of the accumulated amount by the fifth year can be withdrawn.5) A minimum of Rs.500.00 subject to a maximum of
Rs.1,50,000 per annum may be deposited
The subscriber should not deposit more than Rs.1,50,000 per annum as the excess amount will neither earn any interest nor will be eligible
for rebate under Income Tax Act
The amount can be deposited in lump sum or in a maximum of 12 instalments per year.PPF accounts are an ideal investment vehicle for
investors who are risk-averse and do not mind settling for a lower investment return, add financial planners.
