Investment Tips: While investing, the investor pays the most attention to only two things, first – he should get good returns and second – his money should be safe. In this context, Public Provident Fund (PPF) is a great investment option. Not only is it safe, but investing in it also gives you the benefit of tax exemption. The risk in investing in PPF is almost zero as it is fully protected by the government.
For which people it is very beneficial to invest in PPF:-
- Self employed professionals and employees not covered by EPFO
- Those who have no job or business, any organized structure.
Benefits of investing in PPF
Rate of interest
- The central government revises the interest rate on the PPF account every quarter.
- The interest rate is usually 7 percent to 8 percent, which may increase or decrease slightly depending on the economic situation.
- At present, the interest rate is 7.1 percent, which is compounded annually. This is more than the fixed deposits of many banks.
- There is a period of 15 years for the subscribers, after which the amount under tax exemption can be withdrawn.
- Subscribers also have the option to extend it for another 5 years.
- They can also choose whether to continue the contribution or not.
- Tax benefit is available under section 80C of the IT Act.
- A deduction of up to Rs 1.5 lakh can be taken on the amount invested in the scheme.
- Tax exemption is available on both the interest earned in PPF and the maturity amount.
- This scheme is backed by the government, so investment in it is completely safe.
- In this, there is a sovereign guarantee on the interest earned.
- Subscribers can avail loan against PPF account at a suitable rate of interest.
- By opening the account, you can take advantage of the loan in the third and sixth years.
- This is especially beneficial for those applying for a loan in the short term.
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