PPF For Regular Income: How can you get over Rs 10 lakh/year tax-free income from Public Provident Fund?

The government's PPF scheme gives you guaranteed returns and tax benefits. But did you know you can use it to earn a steady tax-free income yearly? Let's find out how to earn Rs 10,13,035 annually from your PPF investment.

Anamika Singh | Jan 28, 2025, 11:43 AM IST

PPF is a popular long-term investment plan. It offers a fixed 7.1% return per year and tax benefits. You can start investing with just Rs 500 at a post office or bank. But the real catch is, that you can earn up to Rs 10,13,035 annually, tax-free, from Public Provident Fund (PPF). Let's see how this is possible with some simple calculations.

Photos source: Pixabay/Representational

(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)

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What is Public Provident Fund (PPF)?

What is Public Provident Fund (PPF)?

PPF is a long-term investment scheme in India that offers tax benefits and returns on investments. It is a great way to save for retirement and diversify your investments. You can easily open a PPF account at a bank or post office. It offers guaranteed returns and tax benefits. Anyone can open an account, whether you're working, self-employed, a student, or even a parent or guardian opening one for your child.

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PPF account maturity period

PPF account maturity period

A PPF account takes 15 years to mature. After that, you can extend it for another 5 years, and then again for another 5 years, and so on, for as long as you want.

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PPF investment limits

PPF investment limits

You can invest a minimum of Rs 500 to a maximum of Rs 1.5 lakh in a PPF account every year.

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PPF tax benefits

PPF tax benefits

Investing in PPF not only saves you money but also reduces your tax liability. You can claim tax deductions on investments up to Rs 1.5 lakh. Plus, the interest you earn and the amount you withdraw are completely tax-free.

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PPF withdrawal rules: Can you withdraw from PPF before 15 years?

PPF withdrawal rules: Can you withdraw from PPF before 15 years?

A PPF account holder is allowed to take 1 withdrawal during a financial year after 5 years, please note it does include the year of account opening. (if the account is open during 2023-24, the withdrawal can be taken during or after 2029-30).

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PPF withdrawal limit: How much can you withdraw?

PPF withdrawal limit: How much can you withdraw?

You can withdraw up to 50 per cent of the balance at the credit at the end of the 4th preceding year or at the end of the preceding year, whichever is lower. (i.e., withdrawal can be taken in 2023-24, up to 50% of the balance as of 31.03.2023 or 31.03.2023, whichever is lower).

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PPF maturity: What to do after completion of 15 years?

PPF maturity: What to do after completion of 15 years?

After 15 years of the maturity period, investors can continue their accounts with or without deposits. 

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PPF investment strategy: Earn Rs 10,13,035 annually

PPF investment strategy: Earn Rs 10,13,035 annually

To generate Rs 10,13,035 annually from PPF one has to begin with Rs 1.50 lakh investment every financial year and continue it till the maturity period of 15 years. To get the maximum benefit of interest, the investment should be made between April 1-5 every financial year. 

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PPF investment: How much will you get after 15 years?

PPF investment: How much will you get after 15 years?

The investment amount in 15 years will be Rs 22,50,000, the estimated interest will be Rs 18,18,209, and the estimated maturity will be Rs 40,68,209. The investor can take an extension of 5 years and keep investing Rs 1.50 lakh a year in the same way as before.

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PPF corpus after 20 years: How much will be estimated maturity amount

PPF corpus after 20 years: How much will be estimated maturity amount

In 20 years, the total investment will be Rs 30,00,000, the estimated interest will be Rs 36,58,288, and the estimated corpus will be Rs 66,58,288. At this stage, the investor can take another extension of 5 years and continue the practice of investing Rs 1.50 lakh a year. 

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PPF corpus after 25 years: How much will be estimated maturity amount

PPF corpus after 25 years: How much will be estimated maturity amount

In 25 years, the total investment will be Rs 37,50,000, the estimated interest will be Rs 65,58,015, and the estimated corpus will be Rs 1,03,08,015.

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PPF corpus after 27 years: Estimated maturity value

PPF corpus after 27 years: Estimated maturity value

In 27 years, the total investment will be Rs 40,50,000, the estimated interest will be Rs 81,06,422, and the estimated corpus will be Rs 1,21,56,422.

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What to do with your PPF corpus after 27 years?

What to do with your PPF corpus after 27 years?

From here onwards, investors can start withdrawing interest on the entire corpus. During extensions, the account holder is allowed to withdraw the interest amount once a year.

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PPF interest calculator: How much will you earn?

PPF interest calculator: How much will you earn?

In a year you will get Rs 10,13,035.

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PPF monthly amount: Estimate your regular income

PPF monthly amount: Estimate your regular income

At 7.1 per cent interest, you will get Rs 71,925 a month. 

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