PPF Account: This is what you did not know about your Public Provident Fund money

PPF Account: Public Provident Fund or PPF is a risk-free investment that falls under the category of EEE means income tax exemption on investment up to Rs 1.5 lakh per annum, income tax exemption on the PPF interest earned and income tax exemption on the PPF maturity amount after 15 years. However, these are well-known facts about the PPF account. There are some other benefits also that a PPF account allows and most people have no idea about them. For example, PPF rules say that one's PPF account can't be attached against a court decree for the recovery of one's unpaid dues. Similarly, one can open a PPF account for the minor child also. One can open a PPF account for one's mentally challenged child too even when he or she is not a minor. 

Speaking on the immunity against attachment available in one's PPF balance, Jitendra Solanki, a SEBI registered tax and investment expert said, "The PPF rules clearly mention that PPF balance can't be attached for recovery of any unpaid debt availed by the PPF account holder. In other words, PPF account balance can't be forgone by the PPF account holder even in the case of any court decree for debt recovery. So, PPF balance is insulated from any kind of liquidation by the lender for recovery of one's money even when he or she has a court decree." 

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So, in the case of a financial crisis, one's PPF balance can be a huge relief to meet the need of finances required. However, Solanki warned investors that it should not be the only reason for investing in PPF. There are some other options like EPF, where an investor can get around 0.75 per cent more returns as EPF interest rate is currently at 8.65 while the PPF interest rate is 7.9 per cent.

Highlighting the PPF benefits for a specially-abled or 'divyang' child, Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "PPF account can be opened by a guardian in case of their child is specially-abled. A guardian can open a long-term PPF account in the name of a divyang child even when he or she is not a minor. This benefit helps a guardian of a specially-abled child, the peace of mind by creating a long-term financial corpus for one's differently-abled child." However, Jhaveri said that one should also invest in liquid funds to meet the immediate financial requirements of a 'divyang' child because in PPF, short-term liquidity issues won't be answered.