Public Provident Fund: You will get Rs 32 lakh on investment of Rs 10 thousand, know what is this cool scheme?

Business Desk – Public Provident Fund: In today’s time, many people give priority to investing only in mutual funds and stock market. This trend is seen a lot especially among young investors. But after the fluctuations in the market, now many investors are also turning towards fixed income instruments.

If you also invest only in mutual funds, then according to experts, you need to change your investment strategy and also invest some part in Public Provident Fund (PPF).

Investment completely protected from market risk

PPF is such an investment option which is not affected by the fluctuations of the stock market. This is a government supported scheme, so it provides both security and trust. In the long run, this scheme helps in creating a strong fund, which you can use for needs like children’s education, marriage or retirement. This is why many people consider it an important part of their retirement planning.

Start with low investment and flexible contribution

The biggest feature of PPF is that investment in it can be started with just Rs 500. There is a maximum investment limit of Rs 1.5 lakh in a financial year. The tenure of this scheme is 15 years, although partial withdrawal facility is available after 7 years. After maturity, it can be extended further in blocks of 5 years.

To invest in this, it is not necessary to invest a fixed amount every month. You can invest whenever you have extra money, making it useful even for those who do not have a regular income.

Big benefit in interest rate and tax

Currently about 7.1 percent annual interest is available on PPF. What makes it special is its tax structure, because it comes in the EEE (Exempt-Exempt-Exempt) category. This means that there is no tax on investment. There is no tax on the interest received either. The maturity amount is completely tax-free. Apart from this, tax exemption is also available on investment in this under Section 80C in the old tax system.

How much return can be made?

If an investor invests Rs 5000 every month in PPF, then the total investment in 15 years will be Rs 9 lakh. On maturity it can increase to around Rs 16,27,284. In this, interest of approximately Rs 7,27,284 is completely tax-free.

If the investment is increased to Rs 10,000 per month, then the total investment in 15 years will be Rs 18 lakh and on maturity the amount can reach approximately Rs 32,54,567, which will be completely tax-free.