PPF Calculator: Turn your Rs 12,500 per month into whopping Rs 1.16 crore! Use this Public Provident Fund trick

PPF Calculator: The Public Provident Fund or PPF is one of the most favoured long-term investment options in India. If someone, who has chosen the old income tax slabs, then he or she will have the luxury to claim tax exemption on up to Rs 1.5 lakh investment in PPF account. According to tax and investment experts, PPF account gets matured after 15 years, but one can extend it for next five years by simply filling Form 1-H. They are of the opinion that investors can extend their PPF account for a period of 5 years and there is no limit on the number of times PPF account can be extended.

Speaking on PPF account, Jitendra Solanki, a SEBI registered tax and investment expert said, "PPF account has a maturity period of 15 years but after the maturity period, one can extend it for next five years by submitting the form 15H within one year of the maturity period." He said that it helps the investor get indexation or compounding benefit on one's money by making the long-term investment more deeper. Solanki was of the opinion that in the old income tax slab, PPF account falls under 'EEE' category means, income tax exemption on investment, PPF interest earned and the PPF maturity amount. However, if a PPF investor is in a new income tax slab, he or she would get tax benefit on the PPF interest earned and PPF maturity amount. So, extending one's PPF account for the next five years will give compounding benefits along with a higher income-tax-free maturity amount.

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Giving example through PPF calculator, Solanki said that in fifteen years, one's Rs 12,500 per month or Rs 1.5 lakh per annum would become Rs 43,60,517. Since an investor can't invest more than Rs 1.5 lakh in a financial year in one's PPF account, one will have to stick to Rs 12,500 per month till the maturity period. But, using the Form 1-H trick, one can make one's Rs 12,500 per month into Rs 73,25,040 and if he or she chooses to further extend it for the next five years, the maturity amount on the same Rs 12,500 per month will be Rs 1,16,60,769.

So, by using this PPF account extension trick on two occasions, an investor can accumulate Rs 1.16 crore in one's PPF account. One can open a PPF account in the name of one's new-born as well.

Such PPF accounts are called PPF Minor account and such a PPF account can be opened within three years of childbirth. However, One's PPF investment can't go beyond Rs 1.5 lakh in a year, which includes PPF account plus PPF minor account.