PPF Calculator: Want to get Rs 39,400 income a month from Public Provident Fund? Here's how much you need to invest
Public Provident Fund (PPF) Corpus Calculator: PPF provides 7.1 per cent interest rate. Deposits up to Rs 1.50 lakh in a financial year, the interest earned, and the maturity amount are tax-free. One also gets the option to continue their PPF account after a 15-year lock-in period with or without making new deposits.
PPF Retirement Planning, PPF interest, PPF retirement corpus, fixed income: Public Provident Fund (PPF) is a guaranteed return scheme run by the post office, and banks, where investors get return in the form of fixed interest. Often used by investors as part of their retirement planning, investors can deposit a minimum of Rs 500 and a maximum of Rs 1.50 lakh in a financial year. The scheme comes up with a 15-year lock-in period, where investors get 7.1 per cent interest. On completion of 15 years, investors can withdraw their corpus or they can continue their investments with unlimited extensions of 5 years each. The scheme also provides tax benefits on deposits and withdrawals.
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PPF extension rules
After a 15-year lock-in period, investors get 2 options regarding their account: they can withdraw their entire corpus or they can continue their investments in the same way they had been doing.
What if one continues investments?
If they continue their investment, they can deposit a maximum of Rs 1.50 lakh in a year. They will keep getting compound interest on their investment.
What if they don't continue investment?
After taking an extension of 5 years, investors can continue without making further investments.
PPF tax benefits
Taxpayers in the old tax regime can get tax benefits up to Rs 1.50 lakh in a financial year on deposits under Section 80C of the Income Tax Act, 1961. The interest earned and the maturity amount are also tax-free.
PPF yearly investment
Every year, the investor needs to invest Rs 1,50,000 between April 1-5 to get the maximum benefit of the PPF investment. They need to make it for 20 years.
What will be total investment in 20 years?
The total investment in 20 years will be Rs 30,00,000.
What will be interest and maturity amount?
The estimated interest in 20 years will be Rs 36,58,288, and the estimated maturity amount will be Rs 66,58,288.
What investor needs to do then?
The investor needs to stop their investment here and withdraw only the interest amount once every year. They can withdraw the amount only once a year during the non-deposit extension period.
What will be the yearly interest amount?
The estimated yearly interest one can withdraw will be Rs 4,72,738.448.
What will be income in a month?
The estimated monthly income will be Rs 39,394.87.