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2 mins Read | 2 Years Ago

8 Benefits of PPF beyond Income Tax Exemption – ICICI Blog

How to Save Taxes Legally? Expert Suggests these 8 Smart Ways

Want to earn assured, attractive, compounded, and inflation-beating returns without taking any risk? Then a Public Provident Fund or PPF is the go to investment solution for you.  PPF is a Government of India-backed investment plan that offers stable & inflation beating compounded returns. It is considered as the best tool for retirement savings. Many risk-averse investors invest in PFF for tax savings purposes. It offers tax benefits on both returns and investments, thus making it a compelling choice among several investors. Let’s understand the tax exemptions related to a PPF.

PPF is one of the few investment plans in India that provides the advantage of Exempt-Exempt-Exempt (EEE) Tax status. The amount deposited in the account in each financial year is exempted from taxes. Similarly, the interest earned is tax free as well and the maturity amount, including the principal sum and the interest, is free from taxation. Apart from tax savings, here’s why PPF is a good investment plan:

Often, savings for the long-term goals like retirement is rarely a part of financial planning nowadays. Saving for your golden years early in life can help build a considerable corpus. One of the investment plans, the Public Provident Fund (PPF), is a safe option for risk-averse investors, who are looking to save on taxes. Under Section 80C, you can avail tax exemption of up to Rs 1.50 lakh, in a single financial year. However, apart from the tax benefits on PPF, the Account provides multiple benefits, such as partial withdrawal, loans against PPF, as they are government-backed and assured returns.


  1. Treated as a pension plan: PPF account is often treated as a good pension product. Unlike other pension plans where pension income is taxable, the interest earned on the PPF Account and the returns are not taxable.
  2. Investment security: Being a government-backed scheme, you can be rest assured of the safety of your funds. You can deposit funds easily through our Digital Banking channels, like iMobile Pay app & Internet Banking in a few clicks.
  3. Assured Returns: Staying invested for the long-term helps to accumulate a sizeable corpus for retirement. The PPF Account mobilises small savings from investors into long-term capital appreciation coupled with interest payments.
  4. Facility to extend the tenure: As a subscriber, you have the flexibility to extend the account for 5 more years after the lock-in period of 15 years.
  5. Invest small, earn big: With a PPF Account, you can start with a minimum investment of Rs 500 and the maximum amount can be Rs 1,50,000
  6. Partial withdrawal: Since the investment product has a lock-in period of 15 years, you are allowed to make a partial PPF withdrawal only after the completion of five years from the date of opening the account.
  7. Transparency in the calculation: The PPF amount is calculated on a yearly basis. The amount you earn is dependent on the interest rate on PPF, which is 7.1% p.a. For instance, if your deposit amount of Rs 1,50,000 on an annual basis for a period of 30 years. After maturity, the total amount you earn would be approx. Rs 1.54 crore.
  8. Facility of loan against PPF: Looking for a short-term loan? As a subscriber, you can apply for a loan against the PPF Account at an agreeable interest rate without any collateral/security. However, one can avail the loan from the third or sixth year.

Any Indian resident can apply for PPF or it can also be opened in the name of an eligible minor. It is easy to apply for a PPF online if you are an existing customer with ICICI Bank. 

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