Public provident fund {final}

PUBLIC

PROVIDENT

FUND

INVESTMENTS BY :-

AFTAB.MULLA 34

ROAD MAP…INTRODUCTION

7 MUST KNOW FACTS ABOUT PPF

FEATURES OF PPF

WHO SHOULD INVEST & WHO SHOULD NOT INVEST

PPF UPDATED AS PER NEW RULES

ADVANTAGES OF PPF

DISADVANTAGES OF PPF

RECOMMENDATION

INTRODUCTION

STATURORY SCHEME OF THE CENTRAL GOVERNMENT OF INDIA

THE SCHEME IS FOR 15 YEARS

LONG TERM INVESTMENT OPTION THAT SUITS ALL INVESTORS

HIGH ON SAFETY

COMES WITH TAX BENEFITS,LOAN OPTIONS AND A LOW MAINTENANCE COST

7 KNOWN FACTS ABOUT PPF

IT REQUIRES JUST Rs. 100 TO START A PPF A/C

PPF A/C HAVE A MINIMUM & MAXIMUM DEPOSIT LIMIT

INTREST CALCULATION IN PPF A/C

PREMATURE WITHDRAWAL FROM PPF

PPF OFFERS MULTIPLE TAX BENEFITS

NEED A LOAN? USE YOUR PPF

CONTINUING PPF AFTER THE 15 YEAR PERIOD

EXAMPLEHere is an example to demonstrate the returns on your PPF. The assumed interest rate is 8% (compounded annually) and the investment is 12000/- Rupees per year for 15 years.

Yrs.Opening

Balance

Investment

Total Investmen

tInterest

Closing Balance

Withdrawal Limit

Loan Possible

1 0 12,000 12,000 960 12,960 – –

2 12,960 12,000 24,960 1,997 26,957 – –

3 26,957 12,000 38,957 3,117 42,073 – 3,240

4 42,073 12,000 54,073 4,326 58,399 – 6,739

5 58,399 12,000 70,399 5,632 76,031 – 10,518

6 76,031 12,000 88,031 7,042 95,074 – –

7 95,074 12,000 107,074 8,566 115,640 29,200 –

8 115,640 12,000 127,640 10,211 137,851 38,016 –

9 137,851 12,000 149,851 11,988 161,839 47,537 –

10 161,839 12,000 173,839 13,907 187,746 57,820 –

11 187,746 12,000 199,746 15,980 215,726 68,925 –

12 215,726 12,000 227,726 18,218 245,944 80,919 –

13 245,944 12,000 257,944 20,635 278,579 93,873 –

14 278,579 12,000 290,579 23,246 313,825 107,863 –

15 313,825 12,000 325,825 26,066 351,891 122,972 –

CONTINUE…

As you can see, an investment of 12000 /- Rupees per year for 15 years has grown into 3, 51,891 /- Rupees (1, 80,000 Rupees was the total amount invested and the rest is interest accrued.)

FEATURES…EXTREMELY LOW RISKLONG TERMTAX SAVINGFLEXIBILITY OF PAYMENTSLIMITED LIQUIDITYHIGH INTREST RATESPERFECT FOR SELF-EMPLOYEDSAFETY OF CAPITAL

WHO SHOULD INVEST YOU SHOULD CONSIDER INVESTING IN PPF IF :-

YOU WANT A STABLE CORPUS FOR RETIREMENT AND ARE RISK-AVERSE i.e. DON’T WANT TO INVEST IN EQUITY

YOU WANT TAX EXEMPTIONS UNDER SECTION 80C

YOU ARE A NON-SALARIED/BUSINESS PERSON

WHO SHOULD NOT INVESTPPF IS PROBABNLY NOT FOR YOU IF YOU ARE :-

IF YOU ARE YOUNG YOU SHOULD INVEST IN EQUITIES. IN THE LONG RUN, RETURNS FROM EQUITIES BEAT EVERYTHING

YOU ARE NOT ELIGIBLE FOR TAXATION. (YOU WON’T NEED THE TAX BENEFITS)

PPF – PUBLIC PROVIDENT FUND

(UPDATED AS PER NEW RULES FROM 01-DEC-2011)

INTEREST 8.6% p.a. (COUMOUNDED ANNUALLY)

MIN AMOUNT : RS.5OO & ADDITIONAL INVESTMENT IN MULTIPLES OF Rs.5. MAXIMUM Rs.1,00,000

A PPF A/C CAN BE OPENED ANYTIME THROUGH OUT THE YEAR

NOMINATION CAN BE DONE AT THE TIME OF OPENING THE A/C OR DURING THE TENOR OF THE ACCOUNT

ADDITIONAL BLOCK OF 5 YRS CAN BE EXCERCISED AFTER MATURITY (15 YRS) ALSO

CONTINUE…

FIRST LOAN CAN BE TAKEN IN THE 3RD FINANCIAL YEAR FROM THE DATE OF OPENING THE A/C

LOAN TAKEN BY THE SUBSCRIBER OF PPF A/C AFTER 01.12.2011 WILL B CHARGED 2% p.a. {PREVIOUSLY 1% p.a.}

TAX BENEFIT CAN BE AVAILED UNDER SECTION 88

THE A/C CAN BE TRANSFERRED ON REQUEST (INCLUDING BANK TO POST OFFICE)

NON-RESIDENT CANALSO OPEN PPF A/C IN BANKS{NON-RESIDENT ACCOUNT}

ADVANTAGESAMOUNT DEPOSITED IN A YEAR CAN BE CONSIDER AS A TAX SAVING INVESTMENT {MAX. Rs. 70,000}

INTREST ON PPF IS ALSO CONSIDER AS A NON TAXABLE INCOME

DEPOSIT IN PPF IS EXEMPTED FROM WEALTH TAX

BALANCE AMOUNT IN PPF A/C IS NOT SUBJECTED TO ANY DEBT OR LIABILITY

CAN NOMINATE ANYBODY TO GET THE BALANCE PPF AMOUNT AFTER DEATH

CAN EXTEND THE PPF A/C FOR A BOLCK YR. OF 5 YRS WITHOUT ANY FUTHER DEPOSITS

DISADVANTAGES

AMOUNT DEPOSITED IN PPF HAS A LOCK IN PERIOD OF 15 YRS, BUT CAN WITHDRAW 50% OF THE AVAILABLE BALANCE PRECEEDING 3YRS FROM THE 7TH YR ONWARDS

IN THE EVENT OF DEATH OF THE DEPOSITOR,THE LEGAL HIRES CANNOT CONTINUE THE A/C

CANNOT BE OPENED BY GRAND PARENTS FOR THEIR GRAND CHILDREN

RECOMMENDATION

EXCELLENT WAY TO GET TAX EXEMPTIONS {UNDER SECTION 80C}

INTEREST RATE IS HIGH COMPARED TO OTHER DEBT INSTRUMENTS LIKE FIXED DEPOSITS {BECAUSE THE INTREST EARNED BY YOU WILL BE TAX FREE}

NEGLIGIBLE RISK OF DEFAULT {BACKED BY GOVT. OF INDIA}

EXCELLENT TOOL FOR RETIREMENT PLANNING {ESPECIALLY FOR NON-SALARIED PERSON}

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www.wikipedia.com

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BIBLOGRAPHY

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