Public Provident Fund(PPF) u/s 80C

In this article I will be writing about the Public Provident Fund (PPF) as the tax savings component. In our previous article, I have explained about the Provident Fund(PF) and its features. PPF is suitable for those who don’t have PF account or any one who is looking for the long term savings. This article explains the features and benefits of opening PPF account. If you have any doubts, please post it in the comments section. Subscribe to our free email updates.

Public Provident Fund(PPF) u/s 80C

The following are key facts about the PPF as the tax exemption investment:

  1. You can deposit maximum of Rs.70000 per year (Update: Revised to Rs. 100000 p.a).
  2. PPF offers 8% interest rates (Update: Revised to 8.6% p.a.).
  3. Interest income is tax free.
  4. It has the lock-in period of 15 years.
  5. You can with draw money from seventh year onwards. If you want the money before seventh year, you can take the loan.
  6. Maximum of 50% amount you can withdraw.
  7. PPF account can be opened with any of the nationalized banks like SBI,etc.

I hope this article would have helped you to understand the PPF and its benefits. This savings scheme is very useful for the long term. You can plan for retirement or open an account for your child. Thank you for reading this article. If you have any doubts, please post it in the comments section.

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  1. Deb says

    Hi, Krishna
    I have one question here, you said that interest amount is tax free, then what about the principal amount? Suppose I have a PPF account of 5000Rs per month. So yearly savings 60K, with interest for 15 years it would be nearly 12 – 15 Lakhs (9 Lakhs my deposit and remaining is interest). Did you mean that only the interest amount is non-taxable and the deposit 9lakhs Rupees is taxable? If it is so then how to avoid this tax?


  2. Kishore says


    PPF interest will calculate on monthly basis or yearly? please clarify my doubt

    For example , if I have deposited 10K on Apr of finacial year starting and again I have deposited 10K on Dec , both will get same intrest rate or is there any differance?


  3. Debraj says

    Hello Krishna,

    Regarding “Maximum of 50% amount you can withdraw.” –> Does it mean that whatever is the amount (principal + interest) that accumulates after 15 years, I can only withdraw 50% of that amount? What happens to the rest 50%? Is it similar to paying 50% as tax?

    Also, if the lock in period is 15 years, but I can withdraw from 7th year onwards, what is the meaning of 15 years lock in?

    Basically, I want to move some funds from FD to PPF, and hence looking into all possibilities.


  4. Seasons says

    Hi Krishna,

    Currently I am having a PPF account forr 7 years and I will be changing my citizenship to US in next year, please advice what will happen in this senario.


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