PPF Calculator/ What is PPF: PPF stands for Public Provident Fund which is a savings-cum-tax-saving instrument in India. PPF was introduced by the National Savings Institute of Ministry of Finance in the year 1968. The main purpose is to organize small savings by offering an amazing rate of interest combined with income tax benefits.
Benefits of PPF Account
- You will receive Income Tax benefit under section 80-C of income tax (Overall limit should be Rs 150,000).
- Interest obtained from PPF Account is 100% tax released.
- PPF maturity Amount is also tax released.
What is PPF Calculator?
PPF Calculator is basically an Online Financial tool which helps you to compute various calculations that are linked with your PPF Account. PPF Calculator helps you to compute the rate of interest earned on the amount of investment made and the total amount obtained after 15 years.
Who can open a PPF Account?
- All the Indian Residents above 18 years of age can open a PPF Account.
- A person can also open a PPF Account of his/her minor. For Example, Parents can open the PPF Account in the name of their Children. However, the Grandparents can’t open the PPF Account in the name of their grandchildren.
- NRI (Non-resident Indian) can’t open the PPF Account in India. While an NRI who is of Indian Origin and has opened a PPF Account long time ago can continue his/her PPF Account until the lock-in period of 15 years.
- Apart from this, HUF (Hindu Undivided Family) can’t open the PPF Account as per rules and regulations but an Account which is opened before 13th May 2005 can be continued till the lock-in-period of 15 years.
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How to Open a PPF Account in banks or in Post office?
In order to open the PPF Account, follow the simple steps given below:
- You can easily open the PPF Account at various nationalized banks or authorized banks or at a Post Office.
- You have to maintain a minimum amount, i.e. Rs 500 per year in a PPF Account.
- You will be able to make maximum deposit Rs 150,000 in your PPF Account. However, if you deposit more than Rs 150,000 in a financial year than you will not get any interest. In a PPF Account, you can deposit the whole Account directly or you can pay the amount in 12 installments.
- The Duration of one PPF Account is 15 years which can be further extended to 5 years.
- The Interest Earned on the PPF Account is tax released while the principal amount is subject to tax deduction under the section 80c of the Income Tax Act. The interest rate on PPF has compounded annually.
How does the PPF Calculator work?
- A PPF Calculator computes the interest every year based on the details provided by you. In a calculator, you have to select the type of deposit (fixed, amount or variable) and the total amount deposited in a year.
- It is accepted that the amount is deposited on the 1st of April every year. The interest is calculated on the basis of current market rate.
- PPF Calculator also provides you a rough estimate of the total amount deposited by you till that particular year.
Types of PPF Calculator
There are total 7 types of PPF Calculator, they are mentioned below:
- PPF Fixed monthly investment: Using this tool, all the individuals will be able to calculate their payable amount for investing in PPF on a regular monthly basis. In this tool, all the individuals have to enter the month of Opening PPF Account, the initial year of opening the Account, enter monthly installment amount and then verify the data and click on submit.
- PPF fixed yearly investment calculator: Using this tool, the Account holder can calculate the payable amount for investing in PPF Account on a yearly basis because the interest rates in PPF changes regularly. To use this tool, an individual will require a financial year of opening the Account and the total investment in a year.
- PPF variable yearly investment Calculator: In order to calculate the PPF that varies yearly, the individual has to enter the financial year and the account deposited for that year. Moreover, the year of opening the PPF Account is also to be entered.
- PPF Benefits Calculator: This Calculator consists of certain essential elements such as fixed annual contribution, interest rate gained in that year, the age of the account holder and the total income of the person. Some advantages of this calculator are as follows:
– Income tax liability before and after investment
– Tax-free income
– Annual savings
– Savings made in 15 years
- PPF available loan calculator: Using this tool, you will be able to calculate the permitted loan amount based on your PPF amount. Here, you have to just enter your PPF Amount.
- PPF available withdrawal calculator: All the PPF Account holders will be able to withdraw the amount from their PPF Account in the 7th year. However, using this tool, the Account holder will be able to calculate the PPF before as well as after extension.
- PPF Maturity Calculator: Using this tool, you will be able to calculate the time when your PPF is going to end.
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Frequently Asked Questions
What is the maturity period of a PPF Account?
The total maturity period for a PPF Account is 15 year, while you can extend the PPF Account for 5 years.
What kind of PPF Maturity and withdrawal options are available?
You can do a withdrawal from the PPF Account after 7 years of the completion from the date of your first deposit required that 50% of the money is available in the account.
How many times can I Extend my PPF Account?
You can easily extend your PPF Account by submitting the Form H to the bank for 5 years in the last year of your Account’s Maturity period. You can apply for Extension of your Account as many times as you want. While you will be able to withdraw only 60% of your money during the beginning of extension period. Also, you will be able to withdraw only once in a financial year.
How to get Loan against the PPF Account?
- Here, you will be able to get Loan benefit between 3rd and 6th financial year of Opening Account.
- You will not be able to get a loan from the 7th year, as you are eligible for partial withdrawal from that year.
- You can repay the entire loan amount directly or you can pay the loan amount in 2-3 monthly installment within a time period of 36 months.
- Interest charged on the loan is 2% more than the interest obtained by PPF Account.
- Due to any reason, you fail to repay the loan amount in 36 months, then you will be charged extra 6% on the regular interest and the amount will be deducted each year from your PPF Account.
- You can take the second loan as soon as you repay the first one.
How to Deactivate my PPF Account?
- In order to maintain your PPF Account, you have to maintain a fixed deposit of Rs 500 every year. If you are not able to deposit the minimum amount your account will be deactivated and penalty will be charged. In order to activate your Account again, you have to pay Rs50 for each inactive year and Rs 500 as the contribution of each inactive year.
- In the case of your death, the entire PPF Amount will be handed over to your nominee. The nominee can continue with your Account.
- If your PPF Account contains more than 150,000 Rs, then nominee has to provide his/her identity proof to get the Amount.
What are the effects of Premature Closure of PPF Account?
You can close your PPF Account after 5 years for medical treatment of any family member or more your higher education. For this, you have to just pay just 1% of your total PPF Account balance.
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