Public Provident Fund (PPF) has long been considered an attractive savings scheme because of its combination of guaranteed returns with tax advantages. At present, its 15-Year PPF investment program offers an interest rate of 7.1% annually compounded yearly. Through Section 80C in the Income Tax Act contributors may claim tax deductions up to Rs 1.5 Lakh annually while still enjoying tax-free earnings and final payout benefits over 24 years – producing an annual payout of approximately 6.73 lakh or 56,060 each month!
PPF Lock-In Period And Extensions
PPF investors must keep their money locked away for 15 years, then extend this term up to 5 years at any one time without restrictions or further extensions. Once contributions have been maintained during an extended participation period investors gain access to regular annual withdraws meeting specific specifications; annual contributions must occur throughout both terms ( 15 years + 5 extensions ). To maximize returns investors must continue annual contributions throughout their 15 year and extension term commitment periods.
Reaching Your PPF Goal
Estimated total when PPF matures after 15 years is Rs40.68 lakh, comprising Rs22.5 lakh principal and interest repayments totalling 18.18 lakh. By increasing investment period from five years to seven and making annual deposits of 1.5 per annum deposit will allow account value to grow up to Rs6658L which includes Rs30L of principal & 36L as interest repaid over this timeframe.
Extending the PPF account by five more years would bring it up to 25 total, totalling 1.03 crore, which includes principal of Rs 36 lakh and annual interest of Rs 65.38 per annum. Once it reaches day 240 mark, approximately Rs94.75 lakh of value has accumulated due to principal and interest.
Create Regular Income With PPF
At 24-years, an investor may begin withdrawing interest annually under certain conditions and receive more than Rs 6.73 lakhs or Rs 56,060 monthly as a return from this investment. An effective approach to PPF extension creation enables investors to establish reliable and tax-advantageous streams of regular income that they can rely on over time.
Disclaimer: Please be aware that this article should only be taken as informational material and does not serve as investment advice. When investing or taking out loans, do your own due diligence and consult a financial adviser prior to taking any actions or taking out loans.
