4. Tax Benefits

PPF is an extremely tax efficient investment option because amount invested in PPF is eligible for deduction under Section 80C, interest earned on the PPF account every year is not taxable, the entire amount including interest at the time of maturity is not taxable.

PPF is one of the few investment options which fall into the category of Exempt-Exempt-Exempt mode of taxation.

5. Loans availed

Loans can be availed from the 3rd financial year excluding the year of deposit. Amount of such loans must not exceed 25 percent of the amount that stood to the account holder’s credit at the end of the second year immediately preceding the year in which the loan is applied for.

A fresh loan is not allowed when a previous loan or interest is outstanding. Interest is charged at a rate of 1 percent if repaid within 36 months and at 6 percent on the outstanding loan after 36 months. The repayment may be made either in lump-sum or in Installments.