PPF: How you can double your income through clubbing your life partner's PPF account; know the trick

PPF: Investing in the Public Provident Fund (PPF) can help you get good returns that are also tax-free. This is the reason why so many Indians like to invest in this government scheme. It also gives assured returns since the interest rate is fixed. Since PPF has been kept in the E-E-E category, your investment, interest, and maturity amount are tax-free. Income tax exemption is available on investments up to Rs 1.5 lakh annually in PPF. But you can increase this investment, and the interest on your investment can also double. Know the calculation...

How does investment double?

Under Section 80C of Income Tax in PPF, tax exemption is available on investments up to Rs 1.5 lakh, which is also the maximum investment limit in PPF.

You can deposit money 12 times a year.

But here is something useful for married investors.

If you open a PPF in the name of your partner, you can double the investment in one financial year and also avail interest on both accounts.

Benefits to married couples on PPF investment

Experts say that by opening a PPF account in the name of their life partner, the investor can invest in PPF instead of their other investment options.

In such a situation, they will have two options.

The first one can deposit up to Rs 1.5 lakh in his account.

At the same time, another can deposit Rs 1.5 lakh in the name of the partner in a financial year.

Different interest rates will be available on these two accounts.

At the same time, tax exemptions of up to Rs 1.5 lakh can be availed of on any one account. In such a situation, your PPF investment limit will double to Rs 3 lakh.

Being in the E-E-E category, the investor will also benefit from tax exemptions on interest and the maturity amount of PPF.

No effect of clubbing provisions

Under Section 64 of the Income Tax Act, income from any amount or gift given by you to your wife will be added to your income.

However, in the case of PPF, which is completely tax-free due to EEE, the clubbing provisions have no impact.

Trick for married people

At the same time, when your partner's PPF account matures in the future, the income from your initial investment in your partner's PPF account will be added to your income year after year.

Therefore, this option also gives married people an opportunity to double their contribution to the PPF account.

The interest rate of PPF for the April-June quarter is fixed at 7.1 per cent.

However, it is subject to change.