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Public Provident Fund Save Tax With Money Depositing

The Public Provident Fund is a scheme which is backed by Government of India. It is a scheme which was started in order to offer the people of India with retirement benefits in terms monetary security to the workers in the unorganized sector and also the individuals who are self employed as a long term small savings scheme.

Eligibility: If you are an Indian resident, then you can open an account under the Public Provident Fund scheme. A minor can also open an account with the help of his/her legal guardians. Also, one person can open only one account under their name. If you are a non-resident Indian or NRI, then under the PPF Scheme, you cannot open an account.

Save Tax: When you make an investment in this scheme, you also automatically qualify for deduction of income tax under Section 80C of the Income Tax Act. This will certainly help you to reduce your overall tax burden.

Salient features of the scheme: The major features of PPF are as follows:

  • You can easily open your PPF account in a post office and even some of the authorized banks branches.
  • It will be possible for you to deposit a maximum of Rs. 1 lakh and a minimum of Rs.500 and in your PPF Account every year.
  • Nowadays the Hindu Unified Family can now no longer open a PPF account.
  • The interest rate which at present is 8.8 per cent is applicable to the lowest balance which accrues between the end of the 5th day and also at the end of the month. This interest will be credited in your account at the end of the year.
  • If you wish to close your PPF account, you can do so at any time 15 years after the date on which it was opened. You can then withdraw the entire amount.
  • At the expiry of 15 years, you can apply for an extension for another 5 years.  
  • With the help of this scheme, you can avail of loans from the 3rd financial year excluding the year of deposit.
  • So, these are some of the salient features of this pet scheme initiated by the Government of India.

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