PPF account alert! Know about Form-H to maximise your benefits, investment return

PPF account alert: Public Provident Fund or PPF is one of the most preferred retirement oriented long-term investment goal. This is a debt-fund which is free from any risk. According to tax and investment experts, PPF accound holder enjoys income tax exemption on his or her investment up to Rs 1.5 lakh under Section 80C of the Income Tax Act, and the income from the PPF is 100 per cent income tax exempted. Hence, the interest incurred on your PPF investment and PPF maturity amount is income tax exempted. A PPF account can be opened at any of the post office or authorised bank. Since, one can't invest more than Rs 1.5 lakh in PPF and not less than Rs 500 in one's PPF account, entire investment in the PPF is income tax exempted. The maturity period of the PPF account is 15 years, however, one can extend one's PPF beyond 15 years provided they have filled the Form-H within one year of the PPF maturity period of 15 years.

Speaking on the PPF maturity and its extension Manikaran Singhal, a SEBI registered tax and investment expert said, "A PPF account period can be extended in 5 years block after the 15 years maturity. But, after 15 years, there is no binding for investing minimum Rs 500 in one's PPF account to keep it open and continued. So, if someone has no need of money after the completion of 15 years maturity period of the PPF account, one can contineu to get the benefit of PPF interest rate without investing a single penny into one's PPF account. But, to avail that PPF interest rate benefit, one needs to inform one's bank or post office by filling the Form-H within one year of PPF maturity period of 15 years." Singhal went on to add that in case of post-office, one can download the Form-H form online and submit it to the concerned post-office after filling that Form-H completely. However, in the case of PPF account in the authorised bank, the PPF account holder will have to visit the bank branch where his or her PPF account exists, and rake the Form-H there and submit it after filling it properly.

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Elaborating upon the benefits of Form-H for PPF account holders who have extended their PPF account for 5 years after the maturity period of 15 years Jitendra Solanki, a SEBI registered tax and investment expert said, "If you want to extend you PPF after 15 years maturity, you must fill-up the Form-H otherwise the investor will lose the income tax exemption under Section 80C of one's PPF income post-15 years maturity. The investor will also lose the income tax exemption on one's income on PPF investments post-15 years of maturity. So, one must submit the Form-H and continue to enjoy the income tax exemption on one's investment, PPF interest and PPF maturity amount." Solanki said that if an investor doesn't submit Form-H after completion of the PPF maturity period of 15 years, he or she won't be able to invest in one's PPF account as well. Currently, for October to December quarter, the interest rate on PPF is 7.9 per cent.