Everything About PPF | 14-Point Comprehensive Guide on the Public Provident Fund scheme
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- Опубліковано 7 сер 2024
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Welcome to The Complete Guide to Public Provident Funds (PPF). The PPF is perhaps India's most popular Small Savings Scheme and in this comprehensive video, we shall delve deep into the intricacies of the Public Provident Fund scheme as I guide you through the process of eligibility, taxation, account opening, extensions, loans, contribution etc. (14 different sub-sections) - an understanding of which will help you maximize the benefits of a PPF account
As one of India's most sought-after investment options, a PPF account offers a unique blend of tax benefits, attractive interest rates, and long-term wealth creation. We begin by explaining the fundamentals of PPF, including how to open an account, eligibility criteria, and the necessary documentation. Whether you're a working professional, a self-employed individual, or a housewife, a PPF account can be your key to financial security. Throughout the video, I shall emphasize the various benefits of a PPF account, including tax exemption on contributions, tax-free interest, and the flexibility to contribute as per your financial capacity. As a bonus, we’ll also look at how the PPF can serve as a tax-free pension tool which makes it a reliable retirement planning tool
Whether you're a first-time investor or an experienced one, this video serves as a valuable resource for understanding the nuances of PPF and harnessing its benefits. Hope you like it.
👉 Video Chapters:
00:00 Introduction to Public Provident Fund
00:38 1. Taxation on PPF accounts
01:52 2. Eligibility Criteria
02:53 3. Opening a PPF account
04:10 4. Minimum & Maximum Contribution
05:12 5. Maturity Period of a PPF account
05:53 6. Extension of PPF account
07:32 7. PPF as a Sort of Tax-Free Pension
08:58 8. PPF for Minors
09:54 9. PPF Interest Rate
11:29 10. Partial Withdrawals
12:27 11. Premature Closure of PPF account
13:30 12. Nomination
14:11 13. Loan against PPF
15:30 14. Attachment by Courts
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Disclaimer: I am not a SEBI registered investment advisor or research analyst. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented
I didn't know so many of these points..always thought of PPF as a simple instrument.. thanks Shankar for this video...❤
Thanks Anujoy. Even I knew just 40% of it when I started researching but as I asked myself more questions, more points came up
Can a Permanent Resident of Canada continue the PPF and when the 15 year period ends, whether the maturity amount will have any tax implications in Canada or in India? Thanks for your guidance
@@pbnair551 Hello Mr. Nair, I'm not certain of tax implications in Canada. On twitter, someone did write about it but this is not verified information & it's better if a tax advisor is consulted in this context. twitter.com/TheReviewPicker/status/1642024820991995904
@@shankarnathAfter maturity ppf ki sbi passbook return milegi ya nahi ???
The most comprehensive talk on PPF ever. The Finance Ministry should put a link of this explainer on its Website. 🏆
Glad you liked it. Thanks!
I never knew that I can get cheaper loans by using PPF. Thanks for this great video Shankar sir 🙏
Most welcome, Vikram. Glad you found it useful. Yes, a 3 year loan at 8.1% seems interesting.
Can a PPF ACCOUNT be transformed into a NPS ACCOUNT?How?
@@debajanisarma1673 I don't think so
I understood more upon re-watching. Thank you very much Shankar, for providing all the necessary points.
Hats off to Mr. Pathak, he is so humble..
Thank you for this video. It was very informative. All these years I thought I knew everything about PPF and I was wrong 😊
Thank you for sharing all the information!
Thank you very much, Iva. Glad you found the video informative
Sir thank you, my perception of how i can leverage PPF has completely changed especially "withdraw only the interest after maturity and extension and get pension without using up your PPF balance" i was thinking of withdrawal only, now i can maximize my passive income tax free after retirement using this. Best wishes to you sir
Yes. That's a brilliant idea.
Glad to hear that, Adithya .. and happy to know this works for you. The important part is to understand the rules and keep a track of potential changes in the future.
this is quiet a perspective. my long term plan is to get to 80 lakhs on PPF account in next 25 years. even if the interest then is 4% it should help.
A comprehensive presentation of such a well known but not fully understood investment. Thanks a lot Shankar ❤
Thank you very much, Karthikeyan
@@shankarnath 😊
You spoke my thoughts about PPF aloud. It's probably the best pension instrument. All it requires is patience.
Good to know that 🙌
This video has lots of information, so many youtubers missed including their videos.. Great Job... Shankar Sir🎉🎉
Thank you Jebastin, glad you found the video useful. The PPF is an essential instrument so it's good to know everything about it esp when it's curated in 16 mins :)
Thanks a lot Mr. Shankar for the reply on NRI PPF a/c. Your videos are highly succinct🙏🏼👍🏻
Most welcome, glad you are liking them
Thanks Shankar Ji for providing clarity . As usual all your presentations in your this channel are of excellent quality always.
Thank you Neelam ji. Glad you found the video's presentation and its content informative and helpful.
Thanks for shedding light on this subject with such depth and clarity.
Most welcome, Mayank. Yes, PPF is an important topic, most of us have a PPF account.
Shankar ji, Many thanks for reminding almost all points... very good content and well researched...
Thanks very much sir .. much appreciated!
PPF is the SAFEST option for retirement - thanks for sharing all the details around PPF!! 👍
Most welcome 🙌
NPS is better with a little more returns, since it has equity allocation.
Thank you for the detailed video. It added much more information to what I already knew
Most welcome, glad you found it useful
Well explained ....You have cleared all my doubts. Thanks.
Glad to hear that
Thanks Mr.Shankar for the comprehensive Video on PPF!
Most welcome, Mr. Krishnakumar. Glad you liked it
Current ppf interest rate is 7.1% ....Great video 👍
Didn't know penalty of 1 percent interest for partial withdrawal,,excellent and unknown points covered in this video
Thank you!
I had lots of questions in ppf . It's very helpful and clear
Glad this video helped 🙌
Thank you very much , very useful information . Many important points regarding after 15 years have been given . Very well explained. Sir request you to upload more videos on retirement planning. Many upload videos of early retirement but no one does videos on what to do with retirement funds . Please enlighten on this as well. Thank you. Your style of explaining is very succinct and to the point.
Most welcome, glad you found the content useful and information. And thank you for your suggestion on retirement planning.
Consistent upto Mark.really appreciable well designed content 🙏
Thank you very much
Thank you sir for such a wonderful informative video. I am big fan of PPF, I could get some new insights like the rules regarding the loan against PPF
Most welcome. Glad to hear that, Sushant .. and hope you'll use this information to good effect and also share the video with others who might find use of this info.
Thank you Shankar for another marvel! Great content, I’ve shared your video link to many of my senior family members. I’m sure they’ll be curious and they’ll love your videos too. Please keep posting such videos. Thank you! -Himanshu
Most welcome & thank you for the shares, Himanshu ji
0:05 what if a person opens a second ppf account and closes it only on maturity I.e after 15 years. Will he be able to get back his principal amount?
Absolutely stellar video... PPF investing 101.... Crisp, clear, concise yet jam packed with info... Now please one video on ELSS funds & some examples of ELSS returns of past 15 to 20 years.. It will be a good alternative to this video also.
Thank you very much, Ravi. I'll try .. but that being said, ELSS has become a really confused category now .. 1st comes index ELSS funds and 2nd, the FinMin has a vendetta to make the new regime the only option when filing returns
@@shankarnath ah I see, but under the new regime is ppf included in EEE when filing for returns or no?
Excellent presentation
Thanks for valuable informations 👏👏👍👍
Most welcome. Happy you found the content useful
best part is pension without tax. hats off.
Thanks, glad you found that point useful
Thank you for providing such detailed video😊
Most welcome. Glad you found it informative!
Very Clear explanation. Thank you sir 😃
You are most welcome 🙌
what a clarity... Excellent one..
Thank you
Best details thank u
Most welcome 😊
Thanks for the detailed explanation with this subject.
Most welcome Deepesh
Wonderful content... Thank you very much...
Most welcome, glad you found it informative
Thanks a lot for clearing many doubts
Most welcome!
Wonderful presentation. God bless❤
Thanks!
Thank you for your valuable information 🙏
You're most welcome
DETAILED INFORMATION THANKS😊
Welcome!
Very informative video
Glad you liked it
Quiet an amazing and detailed video. thank you so much for this. i have already availed 2 extensions on my PPF Account . how many more extensions can i get ? i am 33 and my account was opened when I was a Minor. also I like EEE status as i am in no mood to pay 30% tax on any investment.
Thanks. There are no restrictions on the number of extensions as explained in the video
Very nice video... Loved it... ❤
Thanks!
An excellent session on PPF.
Thank you Gopi, glad you liked it
Badly needed such a deep dive on Senior Citizen Savings Scheme (SCSS) please.
Pls watch info on SCSS in this video: ua-cam.com/video/BH5r_CvsbKw/v-deo.html
Shankar Sir, big fan of your knowledge. Needed some financial advice from you
Thank you
What a fine video! This will go into my 'watch again' list.
Only thing I worry about PPF is the interest rate. It has been steadily declining and we can expect it to fall to 5% in some years time as we keep inflation under control and govt encouraging public to invest more in instruments with some risk rather than risk free assets like PPF. Also with the new tax regime becoming the default regime, the EEE feature also might become obsolete in future.
Overall, I don't see a bright future for PPF in which I've myself invested and which matures for me in 2026.
Thank you!
Thank you, for this detailed video.
One small point is
Some banks ask NRI's to close the account or say nri's can't contribute to existing ppf account .
However both or wrong NRi's can continue to hold and contribute to account until maturity and they can withdraw all the money on
Non - repatriation basis only.
Still not sure how taxation on this works because NRI's would not have paid income tax for few previous years
A grey area.
Most welcome
good well done
Thank you!
Great video. Thanks a lot. Please create a video on Sukanya Samruddhi Yojna and similar government investment schemes.
Thanks for the appreciation and suggestion
What will be the condition when we don't extend the limit nor get maturity on date & time goes on & apply for maturity after a few months..
Thank you so much sir
Most welcome, Rohit
@@shankarnath 🙏
Sir , can one put 1.5 kakh each fin yr after extention of ppf a/c? as early
excellent 👋👋
Thank you!
Can I switch from PPF to NPS .I recently open PPF but one NPS more
I did the 1000th like. :P
Thank you!
Shir Shankar Nath, Following you from your earlier days, stopped following that older channel as was habituated to your voice and method of explaining.
Wish you best of luck
Thanks a ton for the kind words, appreciation and patronage
Really informative video shankar. It would be greateif you can make a similar video on NPS as well. I was trying to search for full fledged video on YT. Didnt find any such video for NPS.
Thanks for the suggestion
Excellent video!
One question on switching between with/without contribution options during extension.. when u say that once a particular option is chosen then that can not be changed in future.. does the 'future' mean only during that particular 5 years block or all the future 5 years blocks extensions.. Do I get to choose between the with/without contribution options everytime I opt to extend after the previous extension ended?
Thanks. Yes, my understanding is you cannot change options in that account forever. I mean there is no explicit option to switch from a "without contribution" extension to a "with contribution" option. That being said, there is some interpretation of rules involved here so I suggest reaching out to the appropriate authorities and seeking a second opinion. It's always a good practice to do that
it's my plan already
Very insightful!! Please create a video on EPF also
Thanks for the suggestion
My PPF account maturity date is on 01 APR 2024 (in few days) , When i should submit the form H for extension with contribution in my bank ? please help!
Thanks a lot sir...... Please explain similarly for NPS
Thanks for the suggestion
Excellent presentation,
Please elaborate more on PPF corpus ….. to be used as Pension withdrawal.
I explained that part in point 7 of the video. Kindly share what more details you'd like to have on this. Additionally, there is a thread on twitter which offers similar details .. have a look: twitter.com/deepeshraghaw/status/1595715721124020224
Hi Shankar Nath, that was good insight about PPF, where as if i want to continue > 15 years, the same is being processed with PPF, and the customer will get compound interest as like previous how was got. In short compound interest will get as long as I continue in depositing money in PPF account. Pls clarify. Thanks, Jayachandar P.
Thank you. Per my understanding, for accounts over 15 years, one need not contribute every time to receive interest. Even if you opt for "extension without contribution", still interest is receivable on the PPF balance. Please have a second check on this as rules might have been updated. Thx!
@@shankarnath thank you on your quick reply. Great inputs.
Thank you Sir. Good one. I think you have mentioned as 400 rs as initial deposit instead of 500 rs in 3:17 time
Yes, slip of tongue
If I transfer PPF A/C from post office to bank in 14th year, so do it again locked in for next 15 years or not?
Great video Shankar Sir. Can you please suggest which is better for retirement, PPF vs EPF vs NPS vs Index Fund. please do reply and if possible make a detailed video like this one.
Hello Sourabh. I can't comment on which is better because this depends on other variables like age, corpus requirement, future goals, savings rate, post-retirement expenses etc. It's like cricket - the required run-rate decides your batting approach (unless you are Bazballing). Thanks for the suggestion though.
One clarity/ question
If I have say 15 lack at the end of 16 years can I draw some amount (say 9 lack) after 16 years and continue my account as usual by depositing regular amount?
Very useful video as always.
Thank you.
Thanks. Yes, please watch the section on extension for more details
I have worked with 2 companies. Both open separate PF for us but since I joined a government job they are discontinued. My first contract job at the Government refused to give me details about it now I'm a regular but at a different department which uses NPS. How can I withdraw all or combine my account can I get a tip sirji.
So many new things .as always.. thanks sir.
One query please
1) now interest rate is 7.1% & let's assume it remains same till 3 more years. If after 3 years interest rate becomes 6 % ,will my entire investment receive only 6.1% from the 4th year?
Yes, the PPF balance for that period (until the next rate change) will be at 6.1%
@shankar, you might want to check if PPF contributions between the minor and his parent are exclusive.
Can you share some opposing literature on this?
Superb
Thanks
Thanks for educating us. Can you please make a video on EPS95, quite a few things are not clear.
Thanks for the suggestion
This was such an in-depth information on what is commonly perceoved tp be a simple instrument - big thumbs up. I had one query. Lets say my 15 year tenure ends in 2024. Can I withdraw amount from that, shut down the account, and restart a fresh one in my name from say 2025/26 onwards?
Thank you, glad you found the same informative and useful. With re: your query, I read somewhere that one can do that i.e. close the PPF account after withdrawing money after 15 years and then start a new one. I haven't come across anyone who has done that but if keen, please do check with your nearest post office
Hi. Thank you for the Video in a case where I opt ted to close the account after maturity and withdraw all the money in this case can I open another account? Thanks again for your time
Hi Raghuram. It seems one can do that i.e. close the PPF account after maturity or the extension block of 5 years. And then open another PPF account. I read this in a Quora post but found no such literature in news or blogs etc. You might want to enquire that scenario from your local post office or bank.
Thank you sir for making this video. I have a question here - if a person's parent had opened a PPF account when he was a minor and then after he becomes a major he himself pays for this PPF. So can he get tax exemption for this under section 80C considering he was not initially making payments for this when he was a minor?
Most welcome. In my view, this major person can claim tax deduction as the PPF account is in his/her name and he/she made the payment. However, since I am not a tax expert, it'll be in your interest to check with your chartered account/tax advisor
👏👏
Questions i have...
Lets say i close my PPF account after 15years and by that tym, Taxation system changes. Wherein, the intrest generated from PPF is taxable and Lets say the principal amount also gets taxable.
Am i liable to pay the tax at that tym? Or is it like the tax system of this year will be followed throughout that PPF account, until i close it.
Thanks for npticing the comment and answering.
Hello. You'll have to take this up with your tax advisor & he/she can give an answer only after the government order has been read and understood.
Thanks for the information Sir.
Can you compare PPF Vs NPS?
Thanks for the suggestion
An absolutely brilliant video.
Loved point 7, using PPF interest as tax free income.
I have a question around it. I have taken my first extension with contribution. When u say that one cant change from with to without, does it mean that u can never do that or u have the option of changing it at the time of next extension.
Also. U mentioned about yhe math if one has chosen the option of with contribution. Could you please elborate on how can we calculate it.
Thank you.
1. With re: your query and from what I have researched - a subscriber cannot change from "with" to "without" and vice-versa. But having said this, there might be a less preferred option aswell i.e. close one PPF account and open another PPF account thereby restarting the 15-year process. I read it on Quora so this is not verified info
2. On "with contribution" part, there is no hitch on the pension math as one can withdraw upto 60% of the balance and in the example, 8% of 50 lakhs is 4 lakhs of interest - which means there is enough withdrawal buffer there. However care needs to be exercised when planning major expenses e.g. say one needs to purchase a house and needs 40 lakhs. However if you have a "with contribution" PPF a/c then only 60% i.e. 30 lakhs in our example is withdrawable. So these scenarios have to be factored.
@@shankarnath thank u so much for the prompt response. This is really helpful.
So I could contributing in a given year say, even the minimum amount of 500 after I retire; and I also have the option of withdrawing, like 7% or 8% in the same year. And the best part is, this income is tax free.
You made my month. 🙏
Yes, you can deposit the minimum and you have the flexibility of withdrawing a small but reasonable % every year during the extension period. This can be done once a year and yes, this is tax free unless you fall under Section 194N which I explained in the Taxation section of the video
Thanks. Unlikely to happen in my case, but will be mindful.
Another gem from you. Can one have PPF account in hisor her name as well as the SSY?
Thanks! Yes, one can open a PPF account in the daughter's name and also have an SSY account.
@@shankarnath thank you
Ppf interest tax free even in new tax regime?
Is it still good to invest in ppf though stocks and mfs give more than that.? If yes how much percentage of savings we can contribute in this?
I don't think one should compare PPF with equities. Afterall:
1. PPF is a public savings program & not a wealth building program
2. PPF is debt-oriented while equities is market-linked. There are pros and cons in both approaches
Hi @shankar after 15 years . if we extend by 5 years do we need to have invest 150000 every year
Hello. This part was covered in the with and without contribution bit. May I request you to watch that chapter again
Sir please discuss NPS in simliar manner and one video on higher pension of EPF.
Thanks for the suggestion
Hi @shankar
Say can i am a major and can i open a PPF account to myself and another one either of my parent ?
Hi. Any Indian citizen can open a PPF account
Iam coming after watching video from physocology in tamil youtube channel
Good to know, Ragupathy. I also watched it now .. very nice of Dr. Jithendra to feature my channel & wonderful to know he likes my content.
Great video @Shankar Nath ! I have a question as to what happens when a PPF account holder dies. As a first step, I guess the nominee has to inform the bank/post office about the death of the account holder. What happens in case the nominee forgets to inform? Let us say, the nominee informs after a year of death. Will the PPF account continue to accrue interest during this period?
Thanks. Per a valueresearchonline article -
1. The balance amount in the PPF account will continue to earn interest till the amount is claimed by the nominee or the legal heir.
2. However, the excess amount deposited in a PPF account after the death of the subscriber will not attract any interest and will be returned as it is to the claimant
www.valueresearchonline.com/stories/51143/on-the-account-holders-death-what-happens-to-the-ppf-account/
@@shankarnath Thanks again!
Very informative. Can you make one on EPF? Especially the confusion on withdrawal. 2 points unclear - What if someone decides an early retirement say in 50is - can they withdraw complete epf? Believe one can retain EPF upto 36 months post early retirement / last job. Not clear on this 36 months. Say one resigns in Dec'22. Is 36 months calculated from Jan'23 onwards or FY - Apr'24 onwards.. Would help clarify the same..
Thank you for the suggestion. While I don't have a timeline, I'll certainly do a video on EPF when I am more prepared
8:30 so should I stop contributing to NPS?
Maximum of 12 contributions are for a particular year or the whole 15 year?
12 per year
❤
*I have been investing 1.5lacks per year in ppf, two installments have been deposited.*
Is it possible to open a new account 2nd time.. I mean after completing 15 years and withdrawing it completly...
You can open a second account after closing your first
Hi Shankar - So PPF without contribution is default option after completion of 15 years ?
Hi, I'm not updated on the latest rules. Here's a related article you'll find useful: www.valueresearchonline.com/stories/52080/should-i-close-or-extend-my-ppf-account/
Thank you 🙌🏻🙌🏻@@shankarnath
Hi Shankar,
Thanks for the awesome content.
I have a question unrelated to the current video, and I'm not sure where to post it, so I'll ask you here. Is it a bad idea to invest solely in the Nifty Small Cap Index for the long term?
Context:
Typically, small cap indices provide higher returns than the Nifty 50 for obvious reasons. However, they are also more volatile, which may be a problem if someone needs to withdraw their investment when the markets are down.
Assuming I am certain that I won't need the money I invest for the next 20 to 30 years, why shouldn't I invest in the Nifty Small Cap Index?
Let's say I can invest ₹50,000 every month. Why should I not put ₹45,000 in the small cap index and ₹5,000 in gold as a hedge?
I claim that I won't need this money for the next 20 to 30 years because I have an emergency fund for six months, term and health insurance, and I expect my income to increase over the coming years, which should be sufficient to meet any other financial goals that arise along the way.
Thank you! A couple of things:
1. It might surprise you but between large, mid and small cap indices -- it's the midcap index which has offered the highest returns. So if returns is your only criteria, then history is on the side of the Midcap150 and not Smallcap250. Even on a 3 year rolling return basis, Midcap150 averages 14.4%, while the Smallcap250 avg is 11.6%
2. Over time, I've seen the large and small cap indices and ofcourse, different asset classes move in cycles of valuations and preference. The smartest way of investing is to work these cycles to one's benefit which not only improves performance but reduces volatility. I covered some of this in my video on Asset Allocation and explained how a 60% equity investor received better returns over a 100% equity investor over the long run. Since you are a long-term investor (20-30 year horizon), you might want to consider that.
@@shankarnath yes I remember the video you are reffering to, I will go watch it again, thank you very much for the prompt reply.
I hope you get the millions of subscribers you deserve, so you cannot reply to everyone like now 😭
Can't we deposit amount monthly instead of 12 months together.?
Yes, you can
How many times ppf account can be extended
No limit to number of extensions
I and my wife we both are NRE staying Abroad.Our PPF maturity comes in 2027.We started it before going abroad and contributing every month ..Please let me know if we being NRE can keep contributing after maturity for another extended 5 years.
In addition to what I have explained in the video, please refer to the PPF regulations of 2019 (PDF attached). The key point is the declaration part itself which says "I hereby declare that I, and the minor( in case of minor account) continues to be Resident Citizen of India at the time of commencement of the block period of five years". In my view, it makes it clear that the applicant (at time of opening or when extending) has to be a resident of India. Pls have a look for yourself
www.indiapost.gov.in/VAS/DOP_PDFFiles/Savings%20Bank/Public%20Provident%20Fund%20Scheme%202019%20English.pdf
Hi sir, after closing ppf, can another new ppf account can be started?
Thnak u
Hi. I read in some Quora post that after closing a PPF, a new one can be opened. However, the answer is not credible and you'll have to do some check on this. Maybe, your closest post office or bank can help.
PLEASE ANSWER THIS: If I open a PPF account this year with Rs. 60,000/- yearly investment, can I increase this yearly investment after some years? (Say after 4-5 years)
Yes, you can