PPF For Regular Income: How can you get over Rs 1,00,000 a year tax-free income?

The PPF is a great way to plan for your retirement and diversify your investments. You can easily open a PPF account at a bank or post office. With PPF, you get guaranteed returns and tax benefits. Anyone can open an account, whether you're working, self-employed, or a student. Even parents or guardians can open an account for their minor children

The maturity period is 15 years. After 15 years, the account holders can extend the account for unlimited blocks of 5 years each. 

The minimum deposit in a financial year is 500, whereas the is Rs 1.5 lakh.

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.

A PPF account holder is allowed to take 1 withdrawal during a financial year after 5 years, please note it does include the year of account opening. (if the account is open during 2023-24, the withdrawal can be taken during or after 2029-30).

You can withdraw up to 50 per cent of the balance at the credit at the end of the 4th preceding year or at the end of the preceding year, whichever is lower. (i.e., withdrawal can be taken in 2023-24, up to 50% of the balance as of 31.03.2023 or 31.03.2023, whichever is lower).

After 15 years of the maturity period, investors can continue their accounts with or without deposits. 

To generate Rs 12,87,575 annually from PPF one has 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. 

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.

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. 

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.

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.

From here onwards, investors can start withdrawing interest on the entire corpus. During extensions, the account holder is allowed to withdraw the interest amount once a year.  

The interest in a year will be Rs 12,87,575.

You will get Rs 91,417 a month.