Sukra - Personal Finance

This is also called PPF - 15 Year Public Provident Fund. The scheme was introduced by the Central Government of India in 1968.

Individuals can open the account in any branch of State Bank of India, Nationalised banks and in Post Office. Only one account is allowed per person. The duration of Fund is for 15 years.

Investment Amount : -

Minimum deposit of Rs.500 and a maximum of Rs. 70,000 can be made in 1 year.

Rate of Interest : -

Rate of Interest on Public Provident fund is 8% per annum as of 2007.
It is calculated on the minimum balance between 5th and last day of the month.
The interest rate is determined and fixed by the Government.

Tax benefits :-

Deposits are qualified for Income Tax Rebate under section 88 of Income Tax Act.
Deposits are exempted from wealth tax. Interest is tax free under section 80 of Income Tax Act.

Loans on PPF :-

You can avail 25% of amount invested in public provided fund as Loan from 3rd year.
Interest is charged at 1% if paid within 36 months and at 6% after 36 months.

Withdrawal :-

You can withdraw from 7th year, but it is limited to one per year.
You can withdraw 50% of balance at the end of 4th year.

You can close the account on 16th Year or can continue for 5 more years with or without contribution.