PPF For Regular Income: How can you get over Rs 1,20,000/month tax-free income from Public Provident Fund?
Public Provident Fund (PPF) is a popular investment option for Indians, including working people, self-employed individuals, and retirees. It helps you save for retirement and currently earns an interest rate of 7.1 per cent per year.
The Public Provident Fund (PPF) was launched in 1968 to help people save money and get guaranteed returns. It also offers tax benefits. Anyone can open a PPF account at a post office or bank with just Rs 500. Now, let's see how you can earn up to Rs 1,20,000 a month tax-free from your PPF investment.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
Public Provident Fund
PPF is a popular investment scheme that offers guaranteed returns and tax benefits under Section 80C of the Income Tax Act, 1961, to individuals. You can open a PPF account in a bank or post office. It is ideal for individuals with low-risk appetite.
Investment tenure in PPF account?
A PPF account has a lock-in period of 15 years on investment. After 15 years, the account holders can extend their account for unlimited blocks of 5 years each.
What is minimum and maximum investment amount in PPF?
The minimum deposit in a financial year is 500, whereas the maximum is Rs 1.5 lakh.
Tax benefits in PPF
Contributions up to Rs 1.5 lakh in PPF are eligible for tax deductions under Section 80C, the interest earned and the corpus are also tax-free.
Can you withdraw before maturity period of 15 years in PPF?
A PPF account holder is allowed to take 1 withdrawal during a financial year after 5 years.
How much can you withdraw at end of preceding year?
You can withdraw up to 50 per cent of the total balance in one transaction at the end of the 4th preceding year or the end of the preceding year, whichever is lower.
What happens to PPF account after 15 years?
After 15 years of the maturity period, you can continue your account with or without deposits.
How to get Rs 1,20,000/month from PPF?
To generate Rs 1,20,000 a month from PPF you have to begin with Rs 1.50 lakh investment every financial year and continue it till the maturity period of 15 years. To get the maximum benefit of interest, the investment should be made between April 1-5 every financial year.
What will be PPF corpus after 15 years?
The investment amount in 15 years will be Rs 22,50,000, the estimated interest will be Rs 18,18,209, and the estimated maturity will be Rs 40,68,209. The investor can take an extension of 5 years and keep investing Rs 1.50 lakh a year in the same way as before.
What will be PPF corpus after 20 years?
In 20 years, the total investment will be Rs 30,00,000, the estimated interest will be Rs 36,58,288, and the estimated corpus will be Rs 66,58,288. At this stage, the investor can take another extension of 5 years and continue the practice of investing Rs 1.50 lakh a year.
What will be PPF corpus after 25 years?
In 25 years, the total investment will be Rs 37,50,000, the estimated interest will be Rs 65,58,015, and the estimated corpus will be Rs 1,03,08,015.
What will be PPF corpus after 30 years?
In 30 years, the total investment will be Rs 45,00,000, the estimated interest will be Rs 1,09,50,911, and the estimated corpus will be Rs 1,54,50,911.
What will be PPF corpus after 34 years?
In 34 years, the total investment will be Rs 51,00,000, the estimated interest will be Rs 1,59,43,144, and the estimated corpus will be Rs 2,10,43,144.
What is next step after 34 years of investment?
From here onwards, you can start withdrawing interest on the entire corpus. During extensions, the account holder is allowed to withdraw the interest amount once a year.
What will be your interest amount?
At a 7.1 per cent interest rate, the interest in a year will be Rs 17,53,595, which is equal to Rs 1,24,505 a month.