PPF Calculator

What is PPF (Public Provident Fund)?

Public Provident Fund (PPF) is a government-backed, long-term savings scheme with tax benefits under Section 80C. It offers guaranteed returns with sovereign backing, making it one of the safest investment options in India.

PPF Calculation Formula

PPF interest is calculated monthly but credited annually. The formula used: A = P × (1 + r/n)^(n×t), where A = Maturity amount, P = Annual deposit, r = Interest rate, n = 1 (annual compounding), t = Tenure. Our calculator uses accurate annual compounding with yearly deposits.

Key Features of PPF

• Tax benefits under Section 80C (up to ₹1.5 lakh per year)
• Minimum deposit: ₹500, Maximum: ₹1.5 lakh per financial year
• Lock-in period of 15 years (extendable in 5-year blocks)
• Interest rate is set by the government quarterly (currently 7.1%)
• Loan facility available from 3rd to 5th year
• Partial withdrawal allowed from 7th year onwards

Example Calculation

Yearly Deposit: ₹1,50,000 | Interest Rate: 7.1% | Tenure: 15 years
Total Invested: ₹22,50,000 | Interest Earned: ₹18,18,209 | Maturity Amount: ₹40,68,209

PPF vs Other Investments

PPF offers guaranteed, tax-free returns, making it better than fixed deposits for long-term goals. Unlike equity, returns are assured. For retirement planning, PPF is excellent due to its sovereign guarantee and tax benefits.

Taxation on PPF

PPF follows EEE (Exempt-Exempt-Exempt) tax status: Investment qualifies for deduction under Section 80C, interest earned is tax-free, and maturity amount is also tax-free. No TDS is deducted on PPF interest.

PPF Account Extension

After 15 years, you can extend your PPF account in blocks of 5 years with or without further contributions. Extended accounts continue to earn interest and enjoy tax benefits.