About the PPF Calculator
The Public Provident Fund (PPF) is a popular, 15-year, government-backed savings scheme in India. It is highly favored for its combination of safety, guaranteed returns, and exceptional tax benefits (EEE status).
Key Features of PPF
- Tenure: The minimum lock-in period is 15 years. After maturity, you can extend the account in blocks of 5 years, with or without making further contributions.
- Investment Limits: You must deposit a minimum of ₹500 per financial year to keep the account active. The maximum deposit allowed is ₹1.5 Lakh per financial year.
- Interest Rate: The interest rate is guaranteed by the Government of India and is reviewed and declared quarterly by the Ministry of Finance.
- Interest Calculation: Interest is calculated monthly on the lowest balance between the 5th and the last day of the month. However, it is credited to the account annually at the end of the financial year. Tip: Invest before the 5th of the month to maximize interest!
Tax Benefits (EEE Status)
PPF falls under the coveted "Exempt-Exempt-Exempt" (EEE) tax category, making it one of the most tax-efficient investment vehicles:
- Exempt 1 (Investment): Your annual contributions up to ₹1.5 Lakh are eligible for tax deduction under Section 80C of the Income Tax Act.
- Exempt 2 (Accumulation): The interest earned every year is completely exempt from income tax.
- Exempt 3 (Maturity): The entire maturity corpus (principal + accumulated interest) withdrawn after 15 years is absolutely tax-free.
Withdrawals and Loans
- Loans: You can avail a loan against your PPF balance between the 3rd and 6th financial year from the year the account was opened.
- Partial Withdrawals: Allowed from the 7th financial year onwards, subject to specific limits and conditions.
- Premature Closure: Allowed only after 5 years for specific reasons like treating a life-threatening disease or higher education of children, but it comes with a 1% penalty on the interest rate.
Why use Instant calculators's PPF Calculator?
Since PPF is a 15-year commitment, predicting the final corpus can be tricky without the right tools. Our PPF calculator lets you model your annual contributions and projects your exact tax-free maturity amount. The visual charts help you see the dramatic effect of compounding, especially in the later years of the 15-year tenure.