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15 lesser known facts about PPF

Source | : By Preeti Motiani

The Public Provident Fund (PPF) is one of the most popular savings vehicles in India. One of the reasons for this is the tax benefit it offers – it comes under the EEE (exempt-exempt-exempt) tax status. What this means is that at the time of investment, the interest earned, and proceeds received at maturity are all tax-exempt or free. Now, this is a fact that a lot of us know about. But there are a few things about the PPF that not many people are aware of.

Here are some lesser-known facts about the PPF that can help you make a more informed investment decision:

The maturity date
It is a widely known fact that the PPF comes with a lock-in period of 15 years. But did you know that the maturity date is not calculated from the date of the opening of account? As per the Public Provident Fund scheme rules, the date of calculation of maturity is taken from the end of the financial year in which the deposit was made. It does not matter in which month or date the account was opened.

Let’s say you made your first contribution on July 26, 2014. The lock-in period of 15 years will be calculated from the March 31, 2015, and the year of maturity, in this case, will be April 1, 2030.

As per the rules, a minimum contribution of Rs 500 per year and maximum of Rs 1.5 lakh per annum is allowed. The limit of Rs 1.5 lakh is applicable on all accounts either held under his/her own name or on behalf of a minor. You either make lump sum or monthly contributions, but it cannot exceed 12 in a financial year.

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