Planning To Invest In PPF? Here’s Why You Should Do It Before April 5 – News18
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The Indian government-backed PPF offers tax-free returns. The Rs 50 charge for updating nominee details is eliminated, allowing up to four nominees. The interest rate is 7.1 percent.
PPF currently offers a 7.1% interest.
PPF Interest Rate 2025-26: A Public Provident Fund (PPF) is a government-backed savings scheme that allows investors to earn tax-free, assured returns with long-term wealth creation benefits. Subscribers can enjoy tax benefits by investing in PPF under Section 80C of the Income Tax Act, 1961. PPF is part of small savings schemes.
Recently, the Indian government eliminated the Rs 50 charge for updating nominee details in PPF accounts. Moreover, account holders are allowed to nominate up to four nominees.
The Indian government currently offers a 7.1 per cent interest rate on PPF investments.
Why Is 5th April an Important Date For PPF Investment?
For those planning to invest in PPF, consider doing so before April 5th to maximise interest earnings. Interest is calculated monthly based on the lowest balance between the 5th and the end of the month but is credited annually.
The deposit limit in the scheme is between Rs 500 to Rs 1.5 lakh annually (in a lump sum or up to 12 instalments).
Even when making a lump-sum deposit, consider doing so before April 5th.
Let’s understand with an illustration how delayed deposits will impact the overall corpus later.
If you deposit a lump sum of Rs 1.5 lakh annually for the next 15 years, you would build a corpus of Rs 40.68 lakh. Investing Rs 12,500 monthly would result in around Rs 39.44 lakh during the same timeframe.
However, making late deposits (after 5th April) would reduce the corpus to Rs 37.98 lakh.
How Will Delay Deposits Impact Tax-Benefits?
PPF interest is entirely tax-free, so delaying deposits also means losing out on tax-free earnings.
In the new tax regime, there is no option to claim a deduction of up to Rs 1.5 lakh per year under section 80C for investments in a PPF account. However, both the interest earned and the amount withdrawn upon maturity remain tax-free.
