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PPF: These days there is no dearth of options in terms of investment. Investors like to invest in different types of schemes to strengthen their portfolio. If you want to invest in a scheme with guaranteed returns and want to invest good money, then you can opt for Public Provident Fund (PPF). PPF is a government guaranteed scheme. It requires long term investment.
The scheme matures in 15 years. If you want to take advantage of this further, you can extend your account for 5 years. Rs 500 to Rs 1.5 lakh can be deposited annually in PPF. At present 7.1 percent interest is being given on it. In this scheme of EEE category, interest can also be saved in three ways. To invest in this, you can open an account in any post office or government bank. If you invest just Rs 1,000 per month in this scheme, you can add up to more than Rs 8 lakh in a few years. Technical information-
Know how more than 8 lakh will join
If you invest Rs 1,000 every month in this scheme, you will invest Rs 12,000 in a year. The scheme will mature after 15 years, but you will have to extend it twice in blocks of 5 years each and continue investing continuously for 25 years. If you invest Rs 1,000 every month for 25 years, you will invest a total of Rs 3,00,000. But according to 7.1 percent interest, you will take only Rs 5,24,641 from interest and your maturity amount will become Rs 8,24,641.
Tax will be saved in three ways
PPF is an EEE category scheme, so you will get 3 types of tax exemption in this scheme. EEE means exempt exempt exempt. In the schemes falling in this category, there is no tax on the amount deposited annually, apart from this, the interest received every year is also not taxed and the entire amount received at the time of maturity is also tax free i.e. investment, interest. /Tax is saved on returns and all three maturities.
Also know the rule of extension
PPF account expansion is done in blocks of 5 years. In case of PPF extension, the investor has two types of options – first, account extension with contribution and second, account extension without investment. You will have to take extension along with contribution. For this you have to submit an application in the bank or post office where you have your account. Keep in mind that you will have to submit this application before completion of 1 year from the date of maturity and a form will have to be filled for extension. The form will be submitted at the same post office/bank branch where the PPF account is opened. If you fail to submit this form on time, you will not be able to contribute to your account.