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Tax Planning through savings and investments

Public Provident Fund

One of the most popular tax savings schemes for decades, Public Provident Funds (PPF) offer deduction under section 80C. The maximum amount eligible for deduction is ₹1.5 lakhs. One can open PPF in banks or post offices. 


The main reason for the popularity of PPF is that it falls under the exempt-exempt-exempt category. As we mentioned earlier, the investment is deductible under section 80C. The interest and maturity are also exempt from tax. 


PPF accounts have a lock-in period of 15 years. On maturity, the investor is given two options – either to withdraw the proceeds from the account or continue for any number of years for a block of 5 years. 


Here are some of the things to note about PPF investments:


Now let us come to the question that must have been hovering in your mind – what about the interest rate? 


As we all know, the interest rate is announced by the government from time to time. The PPF interest rate for Q2 (July-September) FY 2022-23 is 7.1%. 


Here’s a graphical representation of the PPF interest rates from 2011 to 2022:


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