The Public Provident Fund (PPF) is a small savings scheme backed by the government that promises to give members a guaranteed return when their investments reach maturity. According to section 80C of the income tax statute, a PPF account holder is qualified to claim an income tax exemption. The exemption maximum, however, is 1.50 lakh rupees per fiscal year. One of the few risk-free investment options that offer investors a better return is this one.
On PPF, the government is providing a return of 7.1%. As per the government’s directive, the PPF interest rate may alter every quarter. But according to previous patterns, it is probable that in the upcoming years, the rates will remain at or slightly above the current level.
At the age of 25, if you begin investing Rs 5000 each month in PPF, your annual investment would be Rs 60,000. You will earn Rs 7,27,284 over 15 years at the 7.1% interest rate, making a total investment of Rs 9,00,000. The amount due upon maturity would be Rs 16,27,284.
However, if you maintain this investment of Rs 5,000 per month for 37 years, the total investment of Rs 22,20,000 will result in a return of Rs 83,27,232. There would be Rs 1,05,47,232 due at maturity.
As previously mentioned, the PPF has a maximum tenure of 15 years, so if you want to extend it for 37 years, you must complete Form 16-H, the renewal form, at the end of the 15th, 20th, 25th, 30th, and 35th years following the opening date of the PPF account.
