PPF Scheme

PPF Scheme is very common among the investors or financial advisors for its flexible nature. Also, the tax benefits one can avail from a Public Provident Fund scheme make the plan fruitful.

To motivate small investments among the people, the Ministry of Finance, Govt. of India initiated the PPF (Public Provident Fund) in the year 1968. It is mentioned under Section 80C of Income Tax Act, 1961 that the interest earned during the PPF tenure is exempted from one’s tax liability. The PPF deposit up to 1.5 lakh is liable to the exemption and the amount to be received on maturity is also tax-free. Hence, the PPF scheme surely is one of the most tax-efficient and popular money-saving schemes in India.

PPF Account Details

The PPF (Public Provident Fund) is a popular savings scheme. The scheme was introduced by the National Savings Institute in 1968. The PPF scheme was launched with the aim of small investments by granting reasonable returns on it. The scheme offers multiple tax-benefits and has a guarantee from the Central Government associated with it.

Interest Rate on PPF Deposits

The new budget announced by the Finance Minister essentially impacts the financial market. Several financial plans are affected and observer changes in terms of the rate of interest, service tax, return, etc.

 PPF Scheme is also no exception. 

PPF interest rate is also dropped by 0.20% from 7.8% to 7.6%.

Type of Interest Accrued on the PPF Investments

The interest rate provided by the Government of India, towards the PPF accounts, is Compound Interest, and not simple interest. Compound interest is more fruitful for the investor, as each year the principal increases, and the interest is again calculated on the increased principal amount.

Investment Amount/Monetary Deposit

The individual can start to deposit a minimum amount of Rs. 500 in the PPF scheme. The maximum limit of the deposit is now 1, 50,000. The maximum deposit limit has been increased very recently, from 1 lakh to 1.5 lakhs. An individual cannot deposit more than Rs. 1.5 lacs to a given PPF account, in a year. 


The PPF account of any given individual has 15 years. The account is active for this duration. Its validity can also be extended, if the individual so wants, after successful completion of the time frame. The extension is for five years, at each renewal. Investors can also add more money to the account, if they wish, after extension.

Tax Exemption

Under Section 80C of the Income Tax Act, an individual can get an exemption of up to Rs 1.5 Lakhs, for the PPF deposit.

Note: The individual can deposit the money in the name of self, child, or spouse.

Ways of Depositing Money into your PPF account

There are several ways, through which an individual can deposit money to his account, or the PPF account. (including a child, spouse, and member of the family).

These include PO (postal order), check, cash, and online fund transfers.

 You can deposit money in a given PPF account for a maximum of 12 times during a given financial year, via any of these means. These days, PPF online transfer is a more helpful option.

PPF Withdrawal: Partial and Full

You can make partial withdrawals from your PPF account, after the completion of the number of years. Complete withdrawal can only be made after the completion of 15 years or after maturity.

Features and Benefits

  • Partial withdrawals Tax exemption
  • Compound interest
  • Provision of extension after maturity 
  • Multiple modes for depositing money
  • Invest as low as Rs 500
  • Secure and trustworthy, PPF being a government initiative
  • One of the best schemes for long-term investments
  • Useful for planning for retirements, education, and marriage purposes, among others.
  • The policy amount is never available to the creditors, and cannot be attached to any court order. 
  • Easy to access, as the PPF account opening facility is available at multiple venues, nationwide.

Eligibility Requirements

A PPF account online or offline can also be opened for a minor child or kid, below 18 years of age. In this case, the total PPF investments in the account of the minor and guardian/minor cannot exceed 1.5 lakhs, for a given financial year.

Forms Associate with PPF

A number of forms are associated with the PPF scheme. This includes:

Form A: For opening the PPF (Public Provident Fund) account.

Form B: make a deposit into the account, or to repay the loan taken. 

Form C: obtaining partial withdrawals

Form D: request a loan against the PPF account Form E: For making a nominee

Form F: make any change to the information related to the account

Form G: the claim the funds on the account, by a legal heir or a nominee

From H: extend the period of the PPF account, once its maturity has arrived.

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