Every working person knows and understands that his job can disappear at any time due to various reasons that may not be in his control at all. Even the best of workers find themselves searching for jobs because of some reason or another. And that is why they are always working in fear of what may happen. However, it need not be so. Enter the Public Provident Fund (PPF). This is a savings scheme that can give a man a huge amount after a period of just 15 years and bring some relief. And if the investment period is extended, the amount increases by leaps and bounds.
PPF boosts savings culture
All that is required is for the employee to diligently save, year after year. The PPF account holder should also not allow himself to withdraw any money for any reason. This will be a big blow to his chances to get a huge amount of money on maturity.
PPF contribution
Now, the PPF contribution is capped at Rs 150000. And the employee concerned should take advantage of investing the entire amount to get the biggest returns. However, not everyone can invest this much. So, in case the investor contributes just Rs 75000 every year, he will still get a big amount – over Rs 50,00,000. The idea is not to invest in a monthly or quarterly basis, but on an yearly basis. Another PPF trick that you will have to adopt is to extend the PPF period beyond the 15 year period. To get this massive sum of money, PPF account will have to be extended twice in batches of 5 years each.
Here is the simple calculation:
PPF Contribution: Rs 75000
Period: 25 years
PPF Interest rate: 7.1%
PPF amount on maturity: Rs 51,54,007.48
Does PPF have income tax benefits?
Yes, PPF has a huge income tax benefit. The entire Rs 1.5 lakh amount can be easily deducted from the income under Section 80c of the Income Tax Act. PPF is tax free even upon withdrawal.
Note: The sums mentioned here are estimates and the actual amount will be listed in the PPF passbook.
Can PPF really give an investor a huge amount of Rs 50 lakh? Check out what the PPF calculator shows. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
