PPF Account 80C Tax Benefits
The Public Provident Fund (PPF) Scheme is a 15 year term savings scheme under the Central Govt. Of India. This scheme was passed under the Public Provident Fund Act of 1968. It is not only a savings scheme and also gives retirement security, but also it serves as an income tax saving tool. This PPF scheme is a scheme for 15 years. But one can easily extend the tenure by 5 years, on completion of 15 years is anyone wish to. All Indian residents can have one account under the PPF scheme.
A person cannot have more than one PPF account in his/ her name. And in case of minors, a PPF account can be opened by any one parent or by the legal guardian in the minor’s name. Indians residing outside the country, i.e. Non- Residential Indians (NRIs) cannot open a PPF account. But those people who already have an account and shifted to another country outside India and becomes NRI, they can hold that account till 15 years, i.e. its maturity. But NRIs cannot extend their PPF tenure any longer than 5 years, which the resident Indians can.
To open a PPF account one can visit any State Bank of India Branch or any other nationalized banks. Most of the Post Offices also have the facility to open a PPF account. An account opening form, proof of identity (Voter ID/ Passport/ Aadhar card/ Driving License, etc.), address proof (passport/ electricity bill/ telephone bill, etc.), copy of PAN card, one recent photo are the documents needed to open a PPF account.
A PPF account has a minimum deposit of Rs. 500 per financial year. And a maximum of Rs. 1.5 lakh can be deposited in the PPF account. The amount deposited can be given all total or in installments. A maximum of 12 installments can be given in one financial year. One may get loans up to 25% of the amount deposited in his/ her PPF account after the completion of the third financial year in the scheme. A PPF account can be closed prematurely only in case of death of the account holder.
PPF accounts are a great tool for income tax savings. And as it is a scheme run by Govt., it is totally safe and gives high return to your investments. Under section 80C of Income Tax Act., the entire deposit made in the PPF account is eligible for tax deductions. To make tax deductions, one has to show the deposits made under the PPF scheme so that amount will be tax free. One major advantage of PPF account is that the interest earned from the scheme is totally tax free, which is not the case for some other investment policies. So PPF scheme is a great and safe remedy to get 80C tax benefits and have a long term savings.
Other PPF Related Articles