Understanding the Public Provident Fund (PPF)
The Public Provident Fund is a long-term savings and tax-saving instrument backed by the government, designed to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits. Because interest is compounded annually and completely exempt from tax, it remains a cornerstone of fixed-income retirement portfolios.
Key Features of PPF Investments
- Lock-in Period: Standard maturity is 15 financial years, extendable in blocks of 5 years indefinitely.
- Investment Limits: Minimum contribution of ₹500 and maximum of ₹1,50,000 per financial year.
- EEE Tax Status: Contributions qualify for deductions under Section 80C, while interest earned and maturity proceeds are 100% tax-free.