INVP_008 - Taxpublishers.in

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The Tax Publishers Investment in Public Provident Fund (PPF) 1. Most preferred investment medium of its times Investment in PPF is advisable not only from financial point of view but from liquidity point of view as well. Net yield under this scheme works out higher that the rate of interest offered to the persons falling in the lowest slab of tax. Yield to the persons in the higher slabs is still higher. Besides, the new features of interim withdrawals from seventh year have made it all the more attractive. Loan facility is also available from the third financial year itself, i.e., after two years from the opening of the account. The interest earned on PPF contribution is totally exempt under section 10(11) of the Income Tax Act. The rotation of money under the scheme is such that after six years, the deduction under section 80C can be availed of without spending anything out of ones pocket. 2. Limits of number of accounts (1) An individual may open an account by making an application. (2) An individual may also open one account on behalf of each minor or a person of unsound mind of whom he is the guardian: It is provided that only one account shall be opened in the name of a minor or a person of unsound mind by any of the guardian. (3) Joint account shall not be opened under this Scheme. 3. Limits of subscription (1) A deposit which shall not be less than five hundred rupees and not more than one lakh fifty thousand rupees in multiple of fifty rupees may be made in an account in a year. (2) Maximum limit of one lakh fifty thousand rupees by an individual shall be inclusive of the deposits made in his own account and in the account opened on behalf of the minor. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Investment in Public Provident Fund (PPF)

1. Most preferred investment medium of its times

Investment in PPF is advisable not only from financial point of view but from liquidity point of view as well. Net yield under this scheme works out higher that the rate of interest offered to the persons falling in the lowest slab of tax. Yield to the persons in the higher slabs is still higher. Besides, the new features of interim withdrawals from seventh year have made it all the more attractive. Loan facility is also available from the third financial year itself, i.e., after two years from the opening of the account. The interest earned on PPF contribution is totally exempt under section 10(11) of the Income Tax Act.

The rotation of money under the scheme is such that after six years, the deduction under section 80C can be availed of without spending anything out of ones pocket.

2. Limits of number of accounts

(1) An individual may open an account by making an application.

(2) An individual may also open one account on behalf of each minor or a person of unsound mind of whom he is the guardian:

It is provided that only one account shall be opened in the name of a minor or a person of unsound mind by any of the guardian.

(3) Joint account shall not be opened under this Scheme.

3. Limits of subscription

(1) A deposit which shall not be less than five hundred rupees and not more than one lakh fifty thousand rupees in multiple of fifty rupees may be made in an account in a year.

(2) Maximum limit of one lakh fifty thousand rupees by an individual shall be inclusive of the deposits made in his own account and in the account opened on behalf of the minor.