PPF is the best saving scheme and the public can save money through this account to get income through the money invested in future along with tax rebate. This is because while PPF pays 7.1% interest many people may ignore it in preference for something ‘sexier’ that appears to be linked to the market. However, PPF has its own advantages which are ideal for those who would wish to have a guaranteed tax free income after they have retired.
What is PPF?
PPF is a saving scheme that is in the Indian government. It helps to open an account from a bank or post office with minimum deposit of 500 Rs only. Under this investment up to Rs 1.5 lakh per year can be made and returns are completely tax free. The maturity period of the scheme is 15 years and after this you have option to withdraw the amount or you can further invest for 15 years.
Tax Benefits of PPF
PPF has several features that make it an attractive saving instrument; this is because by virtue of Section 80C of the Income Tax Act, every investment made in PPF up to Rs 1.5 lakh per year is tax deductible. Not only the money invested is tax free but also the interest earned and the maturity amount of the fixed deposit is absolutely tax free.
How to get a monthly income of Rs 61000 through PPF?
Here’s how you can generate Rs 61,000 per month by investing in PPF:
Start Investing Early
Initial Investment (Rs 1.5 lakh per year for 15 years): In the same span of 15 years approximately Rs 22.5 lakhs will have been spent. Based on interest earned it will be approximately Rs 18.18 lakh and total corpus build up to Rs 40.68 lakh.
Extend Your PPF Account
For 5 More Years: The corpus of the PPF if you extend for another 5 years and you continue to invest Rs 1.5 lakh per annum would be Rs 66.58 lakh.
Another 5-Year Extension:
Thus after 25 continued investment your total corpus comes up to Rs 1,03,24,000.
Withdraw Interest Only:
You can now begin to withdraw the interest. An amount of Rs 1.03 crore for one year will attract interest of around Rs 7.31 lakh per annum and approximately Rs 61,000 per month.
