A PPF account is opened for an initial period of 15 years. Anyone can open a PPF account, either on his/her own behalf or on behalf of a minor. PPF is a Government scheme – it is backed by the Government of India. Being part of a General Provident Fund or Employees’ Provident Fund scheme does not disqualify you from subscribing to the PPF, but at no point are you allowed to have two PPF accounts in your own name at the same time. Doing so will invite a penalty: if the issuing authority (bank or post office) detects two accounts during the tenure of the scheme, you will get only your principal back. Also, two adults cannot open a joint PPF account -- an account has to be opened singly, but can have one or more nominations. The account can be opened in the Head Post Office or in the branches of SBI or its subsidiaries or in the Nationalised Banks. The account can be transferred at the request of the subscriber from one Post office to another, including Bank to Post Office and vice-versa.
- As The PPF is a government-backed scheme, you can be sure the government will not default. This is the highest security an investment can have and, therefore, the safest.
- Under Section 88, PPF contributions (along with your subscriptions to other schemes that qualify for Section 88 benefits), are eligible for a 20% tax rebate. The maximum you can invest in PPF to avail of the rebate is Rs 70,000 per annum.
- No tax on interest earned. The interest earned is totally exempt from tax under Section 10 (11) of the Income Tax Act.
- The 8% per annum that you get will not be taxed.
- Exempt from all wealth tax. All the balance that accumulates over time is exempt from wealth tax.
Important Articles:
- PPF Planning by A. N. Shanbhag
- PPF investment benefits unavailable to HUF
- Retirement Planning
- Dont ignore the old warhorse -- PPF By Sandeep Shanbag
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A couple was having a discussion about their finances. Finally the husband exploded, "If it weren't for my money, the house wouldn't be here!"The wife replied, "My dear, if it weren't for your money, I wouldn't be here."
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