PPF Full Form Is Public Provident Fund. And PPF account or Public Provident Fund Scheme is one of the most popular long-term savings-cum-investment products, mainly because of its combination of safety, returns, and tax savings. PPF was first introduced to the public in the year 1968 by the National Savings Institute of the Ministry of Finance. Since then it has emerged as a powerful tool for investors to build long-term wealth. Investors use PPF as a tool to build a corpus for their retirement, regularly putting aside a corpus for a longer period (PPF with maturity of 15 years, and tenure extension facility). With its attractive interest rates and tax benefits, PPF is a big favorite with even a small saver.
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PPF Full Form: About
Public Provident Fund (PPF) scheme is a very popular long-term savings scheme in India as it has a combination of tax savings, returns, and protection. And The PPF scheme was introduced in 1968 by the National Savings Institute of the Ministry of Finance. The main objective of this scheme is to help individuals to make small savings and provide a return on savings. PPF scheme offers attractive interest rates and no tax is required to be paid on the returns arising out of the interest rates.
The main objective of the PPF scheme is to help individuals to make small savings and provide returns on savings. PPF scheme offers an attractive interest rate and no tax is required to be paid on the returns arising out of the interest rates.
सार्वजनिक भविष्य निधि (पीपीएफ) योजना भारत में एक बहुत लोकप्रिय दीर्घकालिक बचत योजना है क्योंकि इसमें कर बचत, रिटर्न और सुरक्षा का संयोजन है। और पीपीएफ योजना 1968 में वित्त मंत्रालय के राष्ट्रीय बचत संस्थान द्वारा शुरू की गई थी। इस योजना का मुख्य उद्देश्य व्यक्तियों को छोटी बचत करने और बचत पर प्रतिफल प्रदान करने में मदद करना है। पीपीएफ योजना आकर्षक ब्याज दरों की पेशकश करती है और ब्याज दरों से उत्पन्न होने वाले रिटर्न पर कोई कर देने की आवश्यकता नहीं होती है।
पीपीएफ योजना का मुख्य उद्देश्य व्यक्तियों को छोटी बचत करने और बचत पर रिटर्न प्रदान करने में मदद करना है। पीपीएफ योजना एक आकर्षक ब्याज दर प्रदान करती है और ब्याज दरों से उत्पन्न होने वाले रिटर्न पर किसी कर का भुगतान करने की आवश्यकता नहीं होती है।
How to open a PPF account?
Individuals can open a PPF account in banks or post offices. Earlier, the opening of PPF accounts was allowed only in nationalized banks, however, private banks like Axis, HDFC, and ICICI Bank also offer PPF schemes. Below are the documents required to open a PPF account:
- The application form has to be submitted.
- ID proofs like Aadhar Card, Permanent Account Number (PAN) Card, Passport, etc. have to be submitted.
- Address proof should be submitted with the present address mentioned on it.
- Signature proof.
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Features of PPF Accounts
- How much can you invest in PPF? You can invest at least one lakh rupees. 500 and maximum Rs. 1,50,000 in a financial year.
- What is the tenure of the PPF account? The minimum tenure of PPF is 15 years. So If you want, you can extend it in blocks of 5 years.
- And Who is eligible for a PPF account? Any Indian citizen can open a PPF account.
- You can take a loan on your PPF account between the third and fifth years and make partial withdrawals after the seventh year only for emergencies.
- PPF account you can make only Rs. can be opened from 100 with any recognized deposit every month or lump sum through cash, cheque, DD, or online transfer.
- PPF accounts cannot be held jointly, however you can make a nomination.
- You have to mandatorily make a minimum deposit of Rs. 500 every year.
- The government of India’s guarantee and unmatched tax benefits make PPF account one of the safest, most attractive, and most popular long-term investments.
Why is PPF so popular?
PPF is popular because it is one of the safest investment products. That is, the Government of India guarantees your investment in the fund. The interest rate is determined by the government every quarter. PPF scores over many other investment options mainly because your investment is tax-free under Section 80C of the Income Tax Act (ITA) and returns from PPF are also not taxable.
PPF Interest Rate
At present, the interest rate of PPF has been reduced from 7.9% to 7.1% and is compounded on an annual basis. The interest is paid on 31st March and the interest rate of PPF is fixed by the Ministry of Finance on an annual basis. Interest is calculated based on the minimum balance that is available between the end of the fifth day and the last day of the month.
Tax Benefits you get When you Invest in Public Provident Fund
- Public Provident Fund is an investment that falls under the exempt-exempt-exempt (EEE) category.
- This means that the amount you make in the Public Provident Fund will be deductible (Section 80C of the Income Tax Act).
- The amount you deposit and the interest will be exempt from tax when you withdraw money.
- You should note that you cannot close the Public Provident Fund account before maturity.
- You cannot close the Public Provident Fund account prematurely.
Investments made under a PPF account fall under the exempt-exempt-exempt (EEE) category. Therefore, under Section 80C of the Income Tax Act, all deposits made in the PPF account are tax-free. When a person withdraws from the PPF account; the amount saved as well as the interest earned is also exempt from tax.
PPF Full Form: Importance of PPF
- PPF is considered to be one of the best investment instruments and is suitable for people with a low-risk appetite.
- Returns are low because it is tied to the investment instrument market.
- The returns are fixed and can be used as a diversification tool and also provides tax-saving benefits.
PPF Full Form: PPF Withdrawal
Once your PPF account attains maturity, you can withdraw the entire maturity amount, the tenure here is 15 years. After 15 years the entire amount deposited along with interest will be remitted to your bank account.
However, if you need the money urgently, you can make partial withdrawals from the seventh year onwards. You can make premature withdrawals up to 50% of the total amount available in your account at the end of the fourth year. And However, this facility can be availed only once.
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