Produced by: Mohsin Shaikh
The Public Provident Fund (PPF) is a popular small savings scheme in India offering: – Guaranteed 7.1% interest – Tax benefits under Section 80C – Tax-free interest and corpus
– Minimum deposit: ₹500/year – Maximum deposit: ₹1.5 lakh/year
PPF matures in 15 years, after which it can be extended in unlimited 5-year blocks, with or without further deposits.
– Allowed after 5 years – One withdrawal per financial year – Maximum withdrawal: 50% of the balance at the end of the 4th preceding year or preceding year, whichever is lower
To generate ₹99,000/month (~₹13.92 lakh/year), invest ₹1.5 lakh every financial year starting April 1–5 for maximum benefit.
– 15 years: Investment ₹22.5 lakh | Interest ₹18.18 lakh | Corpus ₹40.68 lakh – 20 years: Investment ₹30 lakh | Interest ₹36.58 lakh | Corpus ₹66.58 lakh – 25 years: Investment ₹37.5 lakh | Interest ₹65.58 lakh | Corpus ₹1.03 crore – 31 years: Investment ₹46.5 lakh | Interest ₹1.20 crore | Corpus ₹1.67 crore
After 31 years, investors can start withdrawing the annual interest, which at 7.1% will be ₹13.92 lakh/year, giving ₹99,000/month tax-free.
– Contributions up to ₹1.5 lakh/year are deductible under Section 80C – Interest earned is tax-free – Matured corpus is also tax-free
– Continue investing ₹1.5 lakh/year during extensions – Withdraw interest annually once the corpus reaches 31 years – This strategy ensures a steady, tax-free monthly income of ₹99,000