Tax benefits on Public Provident Fund or PPF Investments

Public Provident Fund or PPF scheme is a very attractive long term tax saving investment option for salary and self employed individuals in India. With attractive interest rate and tax exemption, investment in a public provident fund or PPF account is advised by many financial advisers.

Today, in this article we will discuss tax benefits on public provident fund or PPF investments.

Tax benefits on Public Provident Fund (PPF) Scheme

Investment in Public Provident Fund or PPF Scheme has following benefits;

  1. Interest earned on Public Provident Fund (PPF) Scheme is fully tax exempted.
  2. Annual subscriptions of PPF qualify for deduction under section 80C of the IT act, 1961 up to the maximum limit of Rs 1, 50,000. Earlier tax deduction limit of Rs. 100000 has now been increased to Rs. 150000. From assessment year 2015-2016 this new tax deduction limit of Rs. 150000 will b applicable to individuals.
  3. Contribution to PPF account of spouse and children are also eligible for tax deduction under section 80C subject to the maximum limit of Rs 1, 50,000.
  4. Withdrawal from public provident fund is also tax free.
  5. Amount received from PPF account at the time of maturity is not taxable.
  6. In case of death of the subscriber, amount received from public provident fund or PPF account is tax free.

For all these tax benefits and attractive interest rates, investment in Public provident fund scheme is very popular among investors.

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