PPF Account: A monthly pension of ₹1 lakh for 20 years, yet over ₹1 crore remains in the account—understand the full fund details..

If you haven't opened a Public Provident Fund (PPF) account yet, start investing in one today. Maintaining an investment in this account over the long term ensures a substantial pension after retirement while also leaving a corpus of over ₹1 crore in the account. PPF is an investment option that offers triple tax benefits: the amount invested is exempt from tax, the interest earned is tax-free, and the investment qualifies for a tax deduction under Section 80C. Moreover, investments made in PPF are 100% risk-free.

According to PPF rules, any investor can open an account at a bank or a nearby post office with a deposit of just ₹100. However, it is mandatory to deposit a minimum of ₹500 into the account during a financial year. The PPF account has a lock-in period of 15 years; an earning individual can deposit up to a maximum of ₹1.5 lakh in a financial year, either in a lump sum or in up to 12 installments.

**How ​​the tax exemption works**
Tax and investment experts note that the PPF account falls under the 'EEE' category. Taxpayers opting for the old tax regime can claim a tax deduction under Section 80C on deposits of up to ₹1.50 lakh per financial year. The interest earned on PPF is also tax-free under Section 10 of the Income Tax Act. This means the entire maturity amount received from the PPF account is 100% tax-free.

**Strategy for post-retirement**
Tax and investment experts believe that a prudent investor can build significant wealth for their retirement by employing certain strategies with their PPF account. Experts recommend adopting a Systematic Withdrawal Plan (SWP) to effectively utilize the PPF maturity corpus after retirement; SWP is an investment instrument that can yield returns of up to 7% over the long term. While the standard maturity period for a PPF account is 15 years, it can be extended indefinitely in blocks of five years. This allows the investor to continue with this risk-free investment option without withdrawing the maturity amount.

**How ​​much your money will grow**
If an earning individual opens a PPF account at the age of 30 and extends it three times, they can invest in the account for a total of 30 years. Suppose the investor contributes ₹1.50 lakh annually. Assuming an average annual interest rate of 7.10% throughout this period, the maturity corpus after 30 years would amount to ₹1,54,50,911. Investing this amount in an SWP can yield annual returns of up to 7%. Even if you withdraw a pension of ₹1 lakh annually for the next 20 years, a corpus of over ₹1.5 crore would remain intact.

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