Investment in Public Provident Fund (PPF) for A.Y. 2022-23 & 2023-24

Investment in Public Provident Fund (PPF)

The Public Provident Fund (PPF) scheme is a very popular long-term savings scheme in India because of its combination of tax savings, returns, and safety. The PPF scheme was launched in 1968 by the Finance Ministry’s National Savings Institute. The main objective of the scheme is to help individuals make small savings and provide returns on the savings. The PPF scheme offers an attractive rate of interest and no tax is required to be paid on the returns that are generated from the interest rates.

PPF Information

Tenure 15 years (Can he renewed in blocks of 5 years)
Interest rate 7.1%
Investment Amount Minimum Rs.500, Maximum Rs. 1.5 lakh p.a.
Maturity Amount Depends on the investment tenure

Eligibility to open a PPF account

You can invest in the PPF if you meet these criteria:

  • You are a citizen of Indian
  • You can open only one PPF account unless your second PPF account is in the name of a minor.
  • You cannot invest in PPF is you are an NRI or HUF.

Features of a PPF account

The main features of the PPF account are mentioned below:

Investment Limits:

For a PPF, you should have a minimum investment of Rs.500 and your maximum investment is Rs. 1.5 lakh for every financial year.

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Tenure of the PPF:

The minimum tenure of a PPF is 15 years. This can he extended in sets of 5 years.

Deposit Frequency:

Your deposits into the PPF account have to be made once every year for a tenure of 15 years.

Opening Balance:

You can open a PPF account with Rs. 100 and annual investments over Rs. 1.5 lakh will not earn any interest.


As a PPF account holder, you can have a nominee for your account when you open the account or after.

Mode of deposit:

You can make a deposit into the PPF account via cheque, cash, demand draft, or online fund transfer.

Risk factor:

The PPF is backed by the Indian Government, and so, it is risk-free and offers guaranteed returns.

Joint accounts:

You can hold a PPF account in only one individual’s name.

PPF Interest Rate

Currently, PPF interest rate has been reduced from 7.9% to 7.1% and it is compounded on an annual basis. The interest is paid on March 31 and the PPF interest rate is set by the Finance Ministry on a yearly basis. The calculation of interest is based on the minimum balance that is available between the close of the fifth day and the last day of the month.

Tax Benefits you get When you Invest in Public Provident Fund

  • Public Provident Fund is an investment which comes under the Exempt-Exempt-Exempt (EEE) category.
  • This means that the deposits that you make in the Public Provident Fund will be deductible (Section 80C of the income Tax Act).
  • The amount that you accumulate and the interest will be exempt from tax when you withdraw the money.
  • You should note that you cannot close a Public Provident Fund account before maturity.
  • You cannot close a Public Provident Fund account prematurely.
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Investments that are made under a PPF account come under the Exempt-Exempt-Exempt (EEE) category. Therefore, under Section 80C of the Income Tax Act, all deposits made towards a PPF account are tax exempt. The amount that has been saved as well as the interest that has been generated are also exempt from tax when the individual withdraws the amount from the PPF account.

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