Are you someone who is looking for saving taxes at the last minute? Well, then this article is for you. Allow us to introduce you to the government-backed savings scheme Public Provident Fund (PPF).
Section 80C of the Income Tax Act offers deductions and exemptions on specific expenditures and investments in a financial year under the old tax regime. Savings tools such as PPF can be used under this provision to reduce tax liability.
How does the PPF scheme work?
You need to open a PPF account with a bank where you have a savings account. You can log in via internet banking and follow the basic instructions. All you need to do is keep the Aadhaar Card number handy at the time of the process.
How much to deposit?
Under this scheme, you can invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh in a financial year. You can also make multiple deposits. It is not necessary to make deposits every month. You can make the necessary transfers based on your convenience.
It must be noted that the PPF account has a lock-in period of 15 years. You can't withdraw the entire amount before the maturity period. Only after keeping the account operational for five years, will you be eligible for part withdrawal.
Who can open a PPF account?
Anyone with a bank account can create a PPF account.
Who can enjoy the benefits of a PPF account?
If you have opted for the old tax regime, PPF is the right choice for you. You can make a declaration under Section 80C and enjoy the benefits.
What are the tax benefits?
Contributions made towards a PPF account qualify for tax deductions under Section 80C. Both the interest earned and the maturity proceeds are tax-free.
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