Feb 17, 2009

How to Invest in PPF - 10 Practical Tips

Public Provident Fund (PPF) is the most popular option (among assured return schemes) under section 80C. I presume that by now you’re well aware of PPF ranking vis-à-vis NSC and would like to open a PPF account.

So, in this post topic of discussion is how to invest in PPF. There are certain tips and tricks you should know before you open a PPF account so that you can realise its full potential.

Here are the 10 practical tips on how to invest in PPF:

PPF Account Opening

1. First, you should open a PPF account even if it’s not on your investment radar. Why? Please read “10 tips for section 80c tax planning”.

Furthermore, leave aside section 80C tax-break/tax-planning, otherwise also PPF is among the best debt option available to you – particularly self-employed persons who don’t contribute to EPF – for retirement planning because it offers tax-free returns--current interest rate is 8% (8.6% w.e.f Dec'11) which translates into pre-tax yield of 12.12% (12.45%) for someone in the 33.99% (30.90%) tax bracket, exemption from wealth tax and the protection from attachment by any order or decree of court.

2. Public Provident Fund (PPF) account rules allow you to open an account in the name of your spouse or children. Children can be major or minor, son or daughter, bachelor or married, dependent or otherwise. The only restriction is that total aggregate contribution in all the PPF accounts should not exceed Rs 70,000 (Rs 1,00,000 w.e.f. Dec'11) in a financial year (i.e. 1st April to 31st March).

Correction (6/10/2009): As per PPF rules, the aggregate limit of Rs 70,000 (Rs 1 lac w.e.f. Dec 2011) is only for the account of an individual and minor combined together. Contribution to other PPF accounts (spouse and major children) is excluded from this limit. The mistake is regretted. It came to light when a reader pointed it out. See comment section.

If you decide to open a PPF account in the name of your spouse or minor child, what are the tax implications? The contribution will be deemed as gift and clubbing provisions under section 64 should apply. But as the interest on PPF is exempt, there’s no income to be clubbed; therefore, nothing to worry about. On maturity of PPF account, if you reinvest the amount somewhere else, the clubbing provisions becomes applicable in both the cases: spouse and minor child. However, if by the time of maturity of PPF, child has become major, the clubbing provision under section 64 (1A) becomes inoperative (i.e., there won’t be any clubbing of income).

So, if you want to make investment in the name of your minor child, PPF is a preferred instrument to avoid the clubbing provisions of IT Act.

3. While opening a PPF account, please don’t forget to appoint a nominee. In fact this is a very important part of making any investment or buying life insurance. You’re also allowed to change the nomination at any time thereafter.

Making Contributions to PPF Account

4. One of the attractive features of Public Provident Fund (PPF) is the flexibility offered to you for making contributions. Unlike NSC, you need not invest a lump sum amount at one go. PPF gives you full discretion to invest in installments within the range of minimum amount of Rs 500 and maximum amount of Rs 70,000 (Rs 1 lakh w.e.f Dec' 2011). Besides, unlike recurring deposits or mutual fund SIPs each PPF installment need not be the same. You can vary the amount of PPF deposit as per your convenience. Also, you can deposit more than one installment in a month. The only limitation is that the total number of installments in a year should not exceed twelve.

Thus, rather than waiting for the end of the year to deposit the one lump sum amount, keep on investing small sums on regular basis in your PPF account.

5. Make sure that you invest by the 5th of every month. Why? Because, in case of PPF accounts, interest is calculated on the lowest balance between the close of the fifth day and end of the month (though credited to your PPF account on annual basis).

6. Keep on investing in your PPF account. Never think of making premature withdrawals. Nevertheless, if ever you face a financial crunch, you can avail the facility of loan (from 3rd year to 6th year) and partial withdrawal (from 7th year onwards). However, both the facilities are subject to certain ceiling limits.

Furthermore, there’s another possibility that you’re not able to make tax-saving investments for availing the deduction under section 80C due to some temporary cash flow problem (although your financial position is ok). In such a case also you just need to rotate the funds by making a partial withdrawal from your PPF account and redepositing the amount in your PPF account.

7. Ensure that you continue to make a minimum deposit of Rs. 500 every year to keep the PPF account active. Otherwise, it becomes ‘inactive’ account and you become ineligible for loan as well as partial withdrawal. However, you can regularize or revive the discontinued PPF account after paying the prescribed default fee along with subscription arrears (i.e. a minimum of Rs 500 for each such year).

8. Though the term of PPF account is 15 years, the contribution made in 16th year (even on the last day) also qualifies for section 80C tax benefit. How? Because the PPF account can be closed only after the 15 years from the end of the financial year in which it is opened. Put another way, PPF account runs for full 15 financial years subsequent to opening and matures on 1st April of the 17th year. In other words, if you make a contribution to your PPF account on 31st March of the 16th year, and withdraw it on the next day (i.e., 1st April of the 17th year), you’ll be allowed a deduction under section 80C.

PPF Account Maturity

9. On maturity, you can still continue with your Public Provident Fund (PPF) account, if you so desire. PPF gives you option to extend the account beyond maturity, each time for another block of 5 years. Put another way, you have three options available to you:

a) Close the PPF account and withdraw the entire amount.

b) Continue the PPF account without making any further contribution and earn the same rate of interest as before the maturity. If you choose this option, you can withdraw the entire PPF amount either in a lump sum or in installments. However, you’re not allowed more than one withdrawal in a financial year.

c) Continue the PPF account with fresh subscription. Please remember that for exercising this option, you’ve to submit form H within a period of one year of maturity. Besides, also note that if you choose this option, (i.e., extending the PPF account while continuing with fresh deposits), then you’ve access to only 60% of the account balance (at the beginning of the extended period) during the next five years (i.e., 40% gets permanently blocked for another 5 years and you can’t withdraw it even in an emergency).

In other words, though you’ll continue to be eligible for section 80C deduction on fresh contributions, it will adversely affect the liquidity.

How to decide whether to close the PPF account or continue with it? The decision depends upon the facts and circumstances prevailing at the time of maturity such as your need for funds (immediate or in the near future), interest rate and availability of other investment opportunities.

10. When closing the PPF account and withdrawing the amount, make sure you do it at the beginning of a month because you are not allowed any interest for the month of withdrawal.

If you think that I’ve missed something or you’ve any other question relating to PPF, please feel free to add in the comment box.

Also see:

1. PPF vs NSC - How to Decide?

2. Section 80C - 10 Smart Tips

3. PPF Returns Calculator
4. Filing Tax Returns - 12 Practical Tips

5. 10 Reasons Why You Need a Savings Plan

6. 10 Tips for Using Credit Cards Smartly

7. 5 Secrets about ULIPs


  1. excellent article. need more of these tricks to make money work harder than we do.

  2. Hi Thanks for this wonderfull post!

    Which banks is the best to take the PPF Account ?

    Though you have explained , once again what to confirm that we can show this for the Income Tax Exumption right ? for the financial year ?


  3. Hi Vikram,

    It doesn’t make any difference because you’ll get the same rate of interest irrespective of the bank / post office in which you open a PPF account.

    Coming to the second part of your question, yes, you can claim deduction u/s 80C from the income of financial year / previous year in which you invest the money in PPF.

  4. Hi, I just stumbled upon your blog...and I really like it...specifically this article is one of the best post I have read about PPF! Kudos!

  5. Hi, What about the total money received on maturity? What sort of tax does it attract?

  6. There is no tax. PPF money received on maturity is completely exempt from tax.

  7. Hi Fisher,

    I have read in one of the newspapers that if one saves Rs.5000 pm and for 35 years (written at 8%), then matured amount will be over Rs. 1 crore approx.

    so regarding this i want to know :-

    1. Can i invest Rs. 5000 pm in a PPF Account for 35 years?
    2. How much tax(approx) will i be paying at the time of maturity?
    3. How should i show this amount Rs. 5000 pm in Salary Slip, etc?
    4. Is there any other formality in terms of Income Tax ?(coz in the starting years, the amount will be less but after 20 or 30 years, amount will be becoming a good one, so that time, how will be showing in income tax?)

    pls suggest me asap

    thanks in advance

  8. 1. Yes, of course you can become a crorepati in 35 years by investing Rs 5,000 p.m. for a period of 35 years in PPF. At the end of 35 years the PPF corpus becomes Rs one crore seven lakh and eighty seven thousand (Rs 107.87 lakh).

    However, as per PPF rules, if you take 5 year extension every time, your investing period is 36 years and not 35 years. And if you invest for 36 years instead of 35 years, the total accumulation in your PPF account will be Rs 117.13 lakh at the end of the period.

    2. As of now, there is no tax on PPF. The entire corpus is exempt from tax. However, as per new tax code proposed to be implemented from April 1, 2011, you might have to pay tax at the time of maturity of PPF [EET regime].

    3. You don’t have to show it in your salary slip.

    4. There is no other formality in terms of income tax.

  9. Hi Fisher,

    First of all, thanks a lot for replying.

    still, i want to know that as you have mentioned that point no 3 (how to be crorepati in 35 years) that "you don't have to show it in your salary slip". In salary slip there is an option of investment regarding, so, dont you think, i should write my PPF details, that i pay monthly Rs. 5000.00. Please advise

  10. Yes, you need to show it in your salary slip so that your employer can take into account your tax savings u/s 80C (which includes PPF investments)for the purpose of tax deduction at source (TDS) from salary.

  11. I wish to withdraw maximum amount from my PPF
    account which is in third extension of 5 years
    maturing on March 2012 by which EET will kick in. Kindly advise.


  12. Adiga, you’ve nothing to worry about because as per the new direct tax code, only new contributions made on or after the commencement of the code will be subject to tax.

  13. hi

    Thanks for this info.
    What about EPF does that attract tax too per the new tax code?


  14. Sekhar, the tax treatment of EPF will also be quite similar to that of PPF.

  15. This is excellent article. However I would like to know if my Wife deposites from her pension account sum of Rs. 40000/= to my PPF account can she get Tax Exemption Under Section 80C? Also if I contribute remaining Rs. 30000/= both will get Tax benifit U/S 80c?


    --Dholkaia G G

  16. Ghanshyam, yes if your wife deposits Rs 40,000 in your PPF account, she will be entitled for tax deduction under section 8OC. And, if you further contribute Rs 30,000 to your own PPF account, you will also get tax benefit u/s 80C on Rs 30,000.

  17. Nice article. But one qn - will my maturity value be taxed at 30%?


  18. Akash, as of now, there is no tax on maturity value of PPF. It is completely exempt from income tax.

  19. Hi,

    I wisgh to invest around 30,000k per annum.
    Want to know would it make any diff if i invest at one go rather than part by part?

  20. Anonymous, yes it can surely make a difference. Why don’t you try to find it yourself? Check out the online PPF Interest Calculator published by me recently.

    To go to the calculator, click the link shown just above the comment section. If you face any difficulty in operating the PPF calculator, please let me know.

  21. could u please tell me that whether the interest on ppf is calculated on minimum balance every month or only in the month of march...i.e. whether its beneficial to make an early payment towards ppf or a payment of lump sum amount should be made in march ???

  22. If you deposit Rs 30,000 in your PPF account every year in the first month of a FY (i.e. April), the total interest will amount to Rs 5.02 lakh on maturity at the end of 16 years (Tenure 16 years). Now, instead of first month, if the amount is invested in your PPF account in the last month of a FY (i.e., March), your total interest income reduces by around Rs 66,000 (Tenure 15 years 1 month).

    However, there is also a midway: rather than investing in PPF in a lump sum, if you spread it out evenly throughout the year and deposit Rs 2,500 every month, the total interest works out to be Rs 4.69 lakh at the end of 16 years.

    This interest differential keeps on increasing with the increase in the amount invested and also with the increase in the maturity period.
    Now choose the option which suits you best keeping in view the interest differential.

    P.S. The calculation is based on the assumption that you invest the amount in your PPF account by the 5th of a month.

  23. Hi,i am unabel to find the calc.
    Can u pls pass.....
    I plan to invest 30k every yr for a tenure of 16months. The amount wud be paid towards ppf as and when i reach my targets/get incentives at work. For ex; this month i intend to deposit 20k and after 4months intend to depoit remaining 10k (hypothetically). Next year, i may deposit either monthly or total 30k.

    Want to know what is the wise thing to do....

  24. Sorry, i can't help you.

  25. Hi,

    Thanks thats a good article with lots of info.

    I have opened a PPF account for my two children. They both are minor. I myself also had a PPF account.

    My question is :

    Will that money be taxable on maturity as per new direct tax code? If yes then who has the tax liability i.e. me who will be depositing the money or my children on whose name that account is?


  26. SIR

  27. Sharad, if at the time of withdrawal from PPF account the child is still a minor, the amount withdrawn from his account would be taxed in the hands of Parent whose total income is higher.

    And, if the child has attained majority, then the PPF withdrawal would be deemed as his income and accordingly taxed in his own hands.

  28. Mishan, please see S.NO. 11 and 17 of sixth schedule of Direct Taxes Code Bill, 2009 and also read chapter X11 (Page No A-34) of Discussion paper on DTC.

    The code shall be applicable from 1st April, 2011 (i.e., FY 2011-12).

  29. Hi,

    First of all thanking you for writing such a helpful article.

    Wanted to know:

    1) if i deposit my money in PPF in the 1st year and want to withdraw it in say before the end of the 5th year would it be taxable ?

    2) Also, would it be taxable if i withdraw it after the expiry of 5th year but before the 15th year (maturity)?



  30. Anand, first as already mentioned you can make partial withdrawals only from the seventh financial year onwards.

    Second, as per the new tax code any amount withdrawn from PPF account is taxable irrespective of the year of withdrawal. In other words, all withdrawals even before the PPF account maturity are also taxable.

  31. I understand that the limit for depositing money in PPF accounts is Rs. 70,000 per financial year. Now some banks say that this limits is for the total deposits of individual account plus minor children's account and also individual's HUF account. Can you please clarify?

  32. According to PPF rules, the aggregate contribution by an individual in his own account and in the account of a minor child can’t exceed Rs 70,000 during a financial year. By implication he is free to make additional contribution (over and above Rs 70,000) in the account of his major children and/or spouse.

    In Tip no 2. I’ve wrongly stated that total contribution in all the accounts (including accounts of his major children and spouse) can’t exceed Rs 70,000 during a financial year. The error stands corrected now. Thanks anonymous, for bringing it to my notice.

    Furthermore, PPF rules also allow an individual to subscribe to PPF on behalf of a HUF out of the funds of the HUF. Here also maximum contribution is limited to Rs 70,000 in a FY.

  33. Dholakia G GOctober 08, 2009

    One clearification please. If I deposite 70000/= in my PPF account, can my wife deposite 40000/= in my PPF account ? If yes, can she get benifit of 80C for her contribution?


    ---Dholakia G G

  34. Mr. Dholakia: It is not possible because as per PPF rules, the total contribution to an individual PPF account can’t exceed Rs 70,000 in a financial year.

  35. Hello Fisher,

    First-of-all, excellent article.
    I have an EPF for which contributions are made by my employer. Now, I would like to know if EPF is taxable. If yes, how much deduction will happen?

    Thanks in advance.

  36. Bhavin: Sorry, I could not undetstand your query.

  37. 1) I have a PPF account with a SBI branch-is there anyway that i can check/invest online?
    2) The bank (SBI) branch did not allow me to open PPF account (one was for myself) for my one year old daughter citing that there can be only one account-please clarify.

  38. Sorry, as of now, I’m not aware of any online facility offered by SBI for investing in PPF. You’ll have to check it with the bank.

    As far as refusal of the bank for opening of account in the name of your minor child is concerned, just talk to any other official of the bank.

    As per the PPF scheme, an individual can’t open two PPF accounts in his name. However, he is allowed to open an additional PPF account on behalf of a minor of whom he is a guardian. The only restriction is that total contribution to both the accounts put together should not exceed Rs 70,000 in a financial year.

  39. Dear Fisher,
    I would like to know if I continuously make the deposit of rs.70,000 (the max deposit)every year, which I'm planning for my child's future what would be the benefits that I may reap at the end of the 16th year and if I extend it to another 4 years what will be the approx amount that can be realised. Kindly help me in this regard. Sir can you give your mail id where I can send my query for clarification.

  40. Sathya: You can calculate it yourself by using online PPF Calulator.

    My mail id is feedback [at] themoneyquest [dot] com.

  41. Dear Mr. Fisher,

    Your article on PPF was very informative. Thanks for the same. Regarding PPF, can you please provide the following information :

    1) Can I claim income tax benefit under sec. 80 C for contribution of Rs. 70,000 made by me to my mother's PPF account ? I am not contributing to my own PPF account eventhough I have one.

    2) If the new direct tax code is implemented on 01/04/2011, I understand that balance in PPF account as on 31/03/2011 will not be taxed on withdrawl. But what will happen to the interest credited after 01/04/2011, belonging to contributions made before 01/04/2011 ? Will there be tax on this interest at the time of withdrawl ?

    Please reply at the earliest.

    Thanks in advance.


  42. CBT: No, you’re not allowed to claim section 80C deduction on account of deposit in the PPF account of your mother (irrespective of whether you’re contributing to your own PPF account or not).

    Further, as per new Direct Tax Code (DTC), only accumulated balance in your PPF account as on 31st March 2011 will be exempt from tax. By implication, any interest earned on this accumulated balance would become taxable at the time of withdrawal.

  43. I appreciate the effort and quality on this site. Thanks for all this Fisher

    One general question...
    I suppose all the advantages of PPF (all that you explained before) hold true taking into accont the new DTC; correct? And this would still rank 1st as a secure savings option

  44. Thanks....one query though I think you have covered this. I was under the impression that I can open a PPF account in my name , wife's name , Son's name & Daughter's name - both of them are minor as of now and contribut Rs.70k every year for allthe 4 accounts. Looks it has to be Rs.70k for Self + Son (as I am guardian) and Rs.70k forWife & Daugher (if wife is guardian)? right?....pls clarify

  45. Rangarajan: Yes, you're quite right.

  46. can nri extend ppf a/c after maturity,for 5 years more,if yes, is he allow to invest in future in ppf a/c from nro a/c ?

  47. can nri continue to keep money in ppf a/c after maturity without extending for 5 years , for earning tax free interest,

  48. Hello Fisher,

    I have opened a PPF in SBI on last FEB 18,2009 and made a payment of Rs.15000, If I invest the same amount by this JAN 18,2010 will it fall under the first year period or second year ? please clarify..

    Thanks a lot..


  49. if my father deposited money through check to my ppf account in my name then who can claim for tax exemption.


  50. Manish: Your father can claim for tax deduction u/s 80C.

  51. Exellent article. One question for withdrawal on PPF matutiry "without further contributions" after completing 15years. Since we can make one withdrawal per year:
    (1) How many years can this be done for, is it continual? what is max. and min. amounts?

    (2) can this be carried beyond 5 years?

    (3) willthis help under new DTC regime to reduce taxation?

    Thanks, Yatin

  52. Fisher,

    My earlier question today, regarding withdrawal on maturity & DTC: I meant, in case I do not remove all money in one year from PPF, I can benefit for taxes under the DTC?



  53. Yatin: In case of continuation of PPF account “without further contribution”, the only restriction is that the total number of withdrawals can’t exceed one in a year.

    Accordingly, point-wise reply to your questions is

    a.) Indefinitely; no maximum or minimum limit on amount of withdrawal

    b.) Yes

    c.) Under DTC (if current provisions implemented): Yes, you can keep on postponing the withdrawal in the hope that one day government will stop taxing you.

    Jokes apart, it would make sense to withdraw some amount on annual basis as per the need rather than withdrawing the entire amount at one go, particularly for those not falling in the highest income tax bracket.

  54. Hi Fisher,

    Excellent post. I immidiately decided to open a PPF a/c on reading the same. However I have one small question: As you mentioned that as per the new tax code, withdrawal will be taxable. So can you please help me understand:
    1. What amount will be taxable? Total maturity amount or only the interest portion in the maturity amount?
    2. In case maturity amount is taxable on withdrawal basis, and if I am NRI at the time of withdrawal, can I withdraw my maturity amount in instalment so that total taxable income is less than exemption limit?


  55. You mentioned PPF upon maturity at the end of 15th year can be withdrawn in full on 1st April of the 17th year.
    In this regard, I opened a PPF Account on 3rd July 1989 for 15 years and extended it for a further period of 5 years. Therefore, the PPF Account matures in March 2010.
    Kindly advise me on the following:

    1. Do I have to make one more PPF contribution into the Account before 5th March 2010 for the FY 2009-2010 ?
    2. Is there a scope for continuing with the PPF Account for another block of 5 years when the current one expires ?
    3. Will there be any Income Tax deduction at source when the full amount is paid to me on 1st April 2010 ?

    Thanks and Regards,

  56. Appusha:

    1. See: "PPF FAQs" published in Jan 2010.
    2. Yes
    3. No

  57. Thank you, Sir !
    Continuing with my Q. No. 3 and your reply, in case I extend the PPF for the 2nd block period of 5 years from 2010-2015, would there be any Income Tax deduction if part amount is withdrawn on 5th April 2011 and / or when the full amount is withdrawn on maturity in 2015 ?

  58. Appusha,

    Again there will be no TDS. I hope you know the difference between tax deduction at source and your income tax liability.

  59. Thank you, Sir for confirming there will be no deduction on the amount if partially withdrawn prior to 2014 or even fully withdrawn upon maturity in 2015.

  60. Hi,

    I want to invest in PPF.
    For the financial year 2010, I have already made my tax savings. So i was thinking of investing in PPF for the year APR-2010 to Mar 2011. but as you have mentioned we need to pay tax at thetime of maturity from the Apr, 2011. Please suggest what is the best option. Should i start my ppf account before Apr, 2011 to avoid paying tax at time of maturity.

    Thanks in advance,

  61. Seeta,

    You seem to be afraid of DTC... Okay, let me remove all your apprehensions about the exact impact of New Tax Code on your PPF investments. Just wait for next post!!

  62. Thanks for excellent guidance. I want to kow if I can get tax benefit if I deposit my money (cheque) in my daughters PPF account even if my daugher is major and married.

  63. Hi!! Fisher,

    This is excellent post. It has resolved some of my querries related to PPF.
    If u can resolve my below querries then it would be of help to me :

    1) My PPF account opening date is 21/11/1995. Kindly inform me of the maturity date.

    2)What is the F.Y. for making the last subscription.

    3)What should i do if i don't want to withdraw money on maturity. Is there any form to be filled in this regard. Also let me know if i opt this option then can i make withdrwal of any amount in any year after maturity.

    4) Suppose after matuirty if i opt for continuing with the account without making fresh investment in that account then can i open a new ppf account for making investment.

    Thanks & Regards

  64. Amit,

    You should read 'PPF FAQs'...see the 'Archives'.

  65. Hi Mr.Fisher,
    Thanks for such a good post. I have some questions on behalf of my brother.
    1) My brother is an NRI. Can he open a PPF account now?
    2) Is there any way to pay the PPF installment by online. If yes how?

    As you said earlier, I am very eager to see your next post regarding New Tax Code on your PPF investments. When can i expect this post?


  66. Karthik,

    1. No, NRI can't open a PPF Account.
    2. Talk to the concerned bank where you've the account.

    The post "Impact of DTC on PPF Investments" is already published. See the Archives.

  67. hi,

    thanks for considering my querry dated March 21, 2010.
    As suggested by you i have already gone through the FAQ's.

    But these doubts still exist.

    It would be very kind on ur part if you can address my querry.

    Thanks and regards
    Amit Tibrewala

  68. Hi Fisher,

    I came across your blog while surfung the net. Your posts are well written and extremely simple to understand. This one on PPF's is brilliant.

    Currently working on a Financial Show and would like to talk to your regarding it.

    Would be great if I could get your E-mail id.



  69. Sir/Madam, I had opened a PPF account in March,1991 and by April,2006 I had extended it by five years(that is,upto March,2011).Please let me know whether I can close the account(as per latest rules)by April,2010.
    With regards from:Raja/28-03-2010/10:55Hrs

  70. Raja,

    Yes, you can close the account.

  71. Hi,
    I am Manecksha Dee. I ve been investing consistently in PPF for the last 14 yrs. I intend to now invest rs70000.00 one shot, in the first week of april 2010 itself.Is this permissible? Wil i attract any I-TAX realted query.
    I was enlightened by my CA that that some ruling had come earlier(possibly union budget 2005/2006 or maybe 2007) that one could do this.Much earlier, one had to invest from ones earned income in the financial year in which one intends to claim rebate under sec 80c.
    But since the ruling,one could invest from ones earlier financial years savings too. Please revert if I'm right on this.
    Also, after the 15yr.term, do i submit form H to sbi to extend my ppf term every 5 yrs.
    could you send me a revert on dee@adcbindia.com
    thks in anticipation.

  72. Dee,

    There is no such requirement any more…the clause was removed a long time back. So, you’re free to invest Rs 70,000 in your PPF account in the first week of April.

    Yes, Form H needs to be submitted every time you extend your PPF account for another 5 years.

  73. hi

    I had opened a PPF account in SBI in May 2004. In the same year, I had deposited Rs.10,000/-. Later on I just forgot about the account and I have not deposited anything after that. Will my account become inactive. Henceforth I will deposit every year. Please let me - how I should go about.



  74. Hi,

    Though the maximum limit for claiming the exemption u/s 80 C is 70 K but one is free to invest even higher then this limit so my question is what will happen to the interest on the PF deposit over and above maximum exemption limit is it still considered tax free or will it be taxed U/H Income from other sources,,,Please guide

    Best Regards,Rajeev

  75. Hi Fisher,

    Please answer my 21/03/2010 questions.

    Thanks and Regards

    Amit Tibrewala

  76. Sir,

    I was into a joint family business, but after the division in the family and seperation from the existing business, I am jobless and totally confused as to which business enter into, more over I have attained the retirement age. Till I start any new trading business, I would like to seek your valuable guidance rearding investing my cash capital so as to get good cash returns monthly for my house-hold & other expenditure. I have a family of 4. I am/was the only working & earning member of the family. Plase help me in this matter.



  77. K K GoyalMay 18, 2010

    From K K Goyal,

    Mr Fisher,

    Your comments on PPF are simply great. I have opened PPF on 24 Mar 1995. I am planning to buy a flat in some upcoming housing society in Noida. It may take some time in finalising the property.
    Educated thru your comments, today, I contacted SBI and wanted to opt to continue without subscription so as I can withdraw the maturity value in lump-sum or in several installment i.e. one withdrawl per year. But they insist that I can not draw the part amount (say 70%)this year and balance next year. When I insisted, they are saying that their computer will not accept such transaction.

    Please let me know as what to do in such situation

    Thanks in anticipation

    K K Goyal

  78. AnonymousJune 20, 2010

    Great article. I have a quick question. Is it mandatory to deposit a fixed amount each year? What if I miss some installments? say, for last three years(in my case)?

  79. Hmm. Very very enlighting article. Thank you very much. But, Mr.Fisher, dont you think the new DTC takes away the sheen on the returns part and the real returns will be hit hard. And since, the period is quite long, (15 years), why not go for SIP investment in Mutual funds????

    Srikanth Matrubai

  80. Much more interesting than i expected....very good job indeed! The power of regular investing and compounding works fantastically in PPF...I am sick n tired of agents selling MF and telling 15% p.a. bla bla bla....everyone goes for it...hay...high risk..high return!!! but PPF is a done deal...no downside :)

  81. Hi,

    Thanx for nice articles...
    BTW: I am still not clear about the contribution in self + minor + spouse PPF a/c.
    Suppose I have a/c opend a/c for spouse + minor child + self then can I contribute Rs. 2,10,000/- per year i.e. Rs. 70,000 per a/c?

    Pl. clarify.

  82. Resp. Sir,

    I am having ppf account from last 10 years now Iwant to open ppf account for my 03 Children & wife then what maximum amount be needed for all five.
    Weather it would be 70,000 X 5 = 3,50,000 Rs. or total 70,000 Rs. for all Five Persons.
    Please clarify & what would be Tax implecation if it is 3,50,000 Rs.

    Thanks & Regards,

  83. I went to SBH Branch at punjaguuta to open an account in my minor daughter name, but they refused to open the same mentioning that one persoand can have only one account and pPF no. and opening another account in child name the computer will not accept
    Kindly advise


  84. what happened to ppf account in case of death of the holder before 15 years.


  85. My HUF consists of my minor son,my wife & myself.I & my wife are
    income tax payees .We have our PPF a/c's for which we make contributions
    from our files.IT laws allow PPF contributions from HUF's.Can I open a
    PPF a/c in the name of my minor son & make contributions from the HUF a/c?


  86. Sir,

    Thanks for the informative article.

    Is it possible to close the a/c within 2-3 yrs of opening and withdraw the money?
    Incase of emergency any option to withdraw before 5yrs?.
    Pls clarify

    Thank you


  87. Hi Fisher.
    Thanks for the wonderful post. Me and my wife both have a PPF account, since 2009 and have successfully managed to reach the target of investing Rs70,000/annum for respective accounts (investing 10k in the first 3months of the FY and 5k thereafter till end of Jan & 2.5k Feb, march)

    My Question:
    1. Other day in the Post office, the lady told me that - investing Rs70,000 in the first week on April will fetch you more returns, rather than breaking the sum each month. I got confused and lost.
    So, wanted to clarify from you on this regards.

    2. Me and my wife are planning this investment for our child's education, etc. Can you please let me know - how much will the withdrawal amount be after completion of 16years and end of 20th year (assuming we invest Rs70,0000 each year from 2009)


  88. Vishwa,

    Why don’t you try the ‘PPF Interest Calculator’…see the link in Archives.

  89. hey fisher,
    What about the point-1 in question above.
    Can u pls confirm.


  90. Vishwa,

    See comment dated September 18, 2009 where i've explained it in detail and if still not convinced, please let me know.

  91. Fisher,

    Very good article indeed. You have put everything in a simple clear terms helping everyone to understand.

    In my opinion, PPF is THE BEST debt investment scheme available in India today and it is a 5-Star scheme and everyone must have one PPF account. Many people discredits this scheme for its long term of 15 years. But this itself is a blessing-in-disguise and helps you save for the long term. To me PPF means Please Put Funds and never ever make any withdrawal from your ppf account unless you are crushed between the walls.

  92. Fisher , Thanks for providing this wonderful article . I am planning to open a PPF account in Jan 2011 for 30-40K approx . Now suppose I dont have money to pay the installments for next 2 years and deposit the minimum of Rs. 500 per annum for these years.And after 2 years , Do I need to deposit the pending installments of previous years or only the 4th year installments ? Need a reply soon .

  93. Niharika,

    Once you deposit the minimum amount of Rs 500 every year in your PPF Account, there does not remain any pending installment, so the question of deposit of pending installment does not arise. Therefore, you can make any contribution in the range of Rs 500 to Rs 70,000 in the fourth year.

  94. I am a retd bank employee.I had opened a 2nd ppf a/c after the maturity of my 1st a/c,seven years ago,mainly for tax purpose.After retirement,I don't need any more investments.Is there any provision to withdraw the amt now,or shd I wait till it matures?

  95. BB,

    You'll have to wait till maturity of your PPF Account.

  96. Hi I am not investment savvy and my resolution for this year is to get my personal finance under my control.
    After reading your article I am little confused regarding PPF account for minor. I had opened a PPF account couple of years back on my name. Last year I was blessed with a son for whom I intend to open a PPF account.
    Can I do that i.e. can I have 2 PPF numbers one for my existing PPF and other 1 for my son?

  97. Vishal,

    Yes, you can have two PPF Accounts, one in your name and another one in the name of your minor son; however, the total deposit in both the accounts combined together cannot exceed Rs 70,000 during one financial year.

  98. Hi Fisher,

    I've a PPF account, wherein I put at least 40k per year. Can you please let me know if my son is also eligible to use the amount I've invested (40K) in PPF as his tax savings?


  99. Dear Mr. Fisher,

    Your article on PPF was very informative. Thanks for the same. Regarding PPF, can you please provide the following information :

    1) My PPF account has matured on 31/03/2010, but I have not closed it till now. If I close it, say on 01/03/2011, at what rate will I get interest for the period from 31/03/2010 to 01/03/2011 ? 8% or 3.5% ?

    2) After maturity, if I want to choose option 9. b) of your above article i.e. "Continue the PPF account without making any further contribution", do I have to submit any form or application ?

    3) Do you have any updated information about the provisions of new direct tax code applicable to PPF ? Is the provision of EET going to be implemented from 01/04/2011 for PPF Accounts ?

    Please reply at the earliest.

    Thanks in advance.


  100. 1. After 15 yrs., can I withdraw 60% of after 15 yrs. balance, during 5 yrs. extended period?
    2.After 20 yrs. & above withdrawal, can I again withdraw 60% of after 20 yrs. balance, during further 5 yrs. extended period?

  101. If its not possible to deposit more than 70k in a financial year, whats th benefit of opening another account in the name of one's child?

    Devajit Barman

  102. Dear Mr Fisher,

    Unfortunately my query dtd 18 May 2010 could not draw your attention.
    My PPF account matured on 31/03/2010 with a balance of Rs 4 Lakhs.

    Now, as per my requirement I had to withdraw the balance amount, but the bank has given an amount of Rs 4 Lakhs only i.e. No interest for period from 1/4/10 to 31/1/2011.

    Similar query has been posted by CBT also.

    Would you please be kind enough to advise?

    K K Goyal

    P.S. @CBT - Can you please help me with the similar problem?

  103. sir;
    I started my ppf account on feb 2010,when i have to pay next due , is ther any time limitation, whether I may permitted to pay my due after march 2011

  104. Sir,
    If I withdraw Rs. 40,000/- from my PPF A/c. and deposit the same amount the next day, how much interest will i lose. will it be from the whole amount lying in my account or only the 40,000/- that i have withdrawn. Pl. clarify at the earliest.

  105. can i deposit Rs. 70,000.00 in my PPF account in the first month of the financial year ?? for example can i deposit Rs. 70,000 in april'11 and avail the benefit of Tax rebate in the financial year 11-12.

  106. AnonymousMay 17, 2011


  107. Sir,

    Can i deposit money in my PPF account by ECS every month? I have my PPF account with Punjab National Bank and want to deposit Rs 5,000 every month. Can you please help me with the query?

  108. Excellent article on PPF, Mr.Fisher,
    I have a PPF account since 1992 depositing each year about Rs.40000/- or so. After reading your article I observe that I should have given Form H for extending the account with contribution after 15 years. I have not given any FORM H but have been depositing each year beyond fifteen years.
    What are the IMPLICATIONS? Will I lose my additional deposit, or, interest or will the Maturity proceeds get affected?

    Please advise.


  109. Kindly change some portion of the article to reflect the new rules/changes that has occurred to PPF in 2011. That is, an increase in interest rate from 8 to 8.6% and increase in upper limit from 70K to 1 lac

  110. Hi Fisher

    Do I need to fill any form at the time of maturity of my PPF account? Is there any set procedure to withdraw money after maturity?


  111. Dear Mr Fisher

    I read ur wonderful educative article on ppf
    i have one query :

    I understand from ur article n comments that annual contribution to
    ppf is 1 lakh for individual and minor account taken together .

    Point of difference : I after discussing with some C.A. found that you can contribute 1 lakh each to urs and minor children but the total deduction claimed under sec 80 c cannot be more the 1 lakh together for individual and minor account taken together . Also you will get interest on each of 1 lakh deposited in ur individual and minor account upto 1 lak each subject to deduction has been taken 1 lakh combined for individual and minor accounts

  112. when u say that amount deposited by 5th of the month is eligible for interest for that month,does it mean a local chq deposited on 5th is also eligible for interest for that month or it should be clear funds by 5th.
    if it is earlier then pl give reference to particular rule/guideline of GOI because GPO Kolkata and UBI kolkata insist that the fund should be clear in account by 5th and because of this i have lost lot of interest


  114. AnonymousJuly 24, 2014

    If i deposit rs.10000 as 1st installment,so can i deposit rs 2000 as 2nd installment

  115. Hi anand,
    If a maturity period of 15 year is over, and then we can extend it for 5 yrs block. So how many times we can extend in such blocks? Are there any limit after these 15 years for deposits? And what can be the maximum balance one can get after closing the account? In lakhs or crores? Please do reply.
    Thank you


  116. Sir, I just want to know whether PPF contributions can be made with the funds which are from other sources (such as gifts to spouse). Suppose my spouse got a gift amount of Rs. 1.0 lakh from her father. Can that amount be invested in the PPF account which is in my name? Please advise

  117. sir i want to know that, what is the best option for depositing money in ppf account for making a good return whether to deposit monthly basis on every 1st or 2nd of that month or every year in a lumpsum amount. Please suggest me I am a little bit confused ...........

  118. if i deposit more than 2000000 rupees now what about the interest for the extra 50000 amount deposited. if govt wont pay interest for extra 50000 rupees this financial year, will it be calculated for next financial year in the total amount dr suresh


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