Public Provident Fund

EEE stands for Exempt-Exempt-Exempt. Your investment qualifies for deduction under Section 80C (exempt), the annual interest earned is not taxed (exempt), and the maturity amount is completely tax-free (exempt). This makes PPF one of the most tax-efficient investments available.

Partial withdrawal is allowed from the 7th financial year onwards, up to 50% of the balance at the end of the 4th year or the preceding year, whichever is lower. You can also take a loan against your PPF balance from the 3rd to the 6th year.

If you do not deposit the minimum Rs.500 in a year, your account becomes inactive. To reactivate, pay Rs.500 for each defaulted year plus a penalty of Rs.50 per year, along with the current year minimum contribution.

No. An individual can hold only one PPF account. If a second account is discovered, it will be merged with the primary or closed, with interest paid only at the Post Office Savings Account rate for the duplicate.