For over half a century now, investment in PPF under the Public Provident Fund Scheme, 1968 has been a favourite savings avenue for several investors and is still standing tall.
It is one of the most popular small savings schemes, and why would it not be. After all, the principal and the interest earned have a sovereign guarantee and the returns are completely tax-free.
It offers a return of 7.80 per cent per annum (of course subject to change every three months). For a tax assessee in the highest tax bracket at 30.90 per cent, it translates to nearly 11.28 per cent taxable return. Surely, we can’t think of many taxable investments which provide such high pre-tax returns.
In terms of income tax implications, they also qualify for E-E-E (exempt, exempt, exempt) tax category, which means you are not liable to pay tax at all three levels – investment, earning and withdrawal.Read More →