Post Office Scheme If you want to take advantage of tax exemption, then you can invest in Public Provident Fund (PPF) of India Post. One can deposit a minimum of Rs 500 and a maximum of Rs 1.50 lakh in a financial year in PPF account.
Nowadays investing has become very risky. Sometimes it becomes difficult to come to a conclusion as to where to invest the money, so that it is safe. Apart from this, every man also wants to save tax on his hard earned money. If you want to take such a scheme in which you get good returns along with saving your tax, then we are going to tell you about such a scheme of India Post, where you will benefit from both.
The Public Provident Fund (PPF) scheme of the post office gives you a good option of saving along with tax saving. In this, you can save a significant amount in the form of tax along with a safe investment. Let us tell you about this scheme.
Who can open account
Any adult Indian citizen can open a PPF account in a post office. A guardian can also open this account on behalf of a minor or a mentally challenged person. But only one PPF account can be opened in any post office or any bank across the country.
How much money can you deposit
One can deposit a minimum of Rs 500 and a maximum of Rs 1.50 lakh in a financial year in PPF account. The amount can be deposited in any number of installments in multiples of a minimum of Rs 50 and a maximum of Rs 1.50 lakh in a financial year. The account can be opened by cash/cheque. This deposit is exempted from tax under section 80C of the Income Tax Act.
Account closure
If you do not deposit minimum Rs 500 in any financial year then your PPF account will be closed. Loan/withdrawal facility is not available against closed accounts. However, the closed account can be revived by paying a fee of Rs 50 for each default year along with Rs 500.
How much interest will you get
Interest on PPF account will be applicable on quarterly basis. Interest for the calendar month will be calculated on the minimum balance in the account between the end of the fifth day and the end of the month. The interest earned is tax free under the Income Tax Act.
What is the maturity period
The maturity period of PPF account is 15 years. This does not include the year the account is opened. You can extend your account for further 5 years by submitting the post office emne extension form.
Premature closure of PPF account
Premature closure of PPF account will be allowed subject to the following conditions-
- In case of life-threatening illness of the account holder, his/her spouse or dependent children.
- In case of higher education of the account holder or dependent children.
- In case of change in the resident status of the account holder.
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