The Public Provident Fund (PPF) is a statutory, long term, savings-cum-tax-saving scheme of Government of India under the provisions of the Public Provident Fund Act, 1968.
History of PPF:
The National Savings Organization (NSO) introduced the Public Provident Fund (PPF) scheme in 1968 to mobilize small savings from the workers of unorganized sector and self employed individuals with a vision to provide them retirement security.
Though the scheme was originally for the workers of unorganized sector & self employed individuals, the salaried class, business class and other investors have shown their interest. The deposits made in PPF Account are eligible for tax deduction Under 80C of Income Tax Act, your maturity (principal & interest) is exempt from income tax as well, and it is a perfectly safe instrument which cannot be attached in case of debt or liability. The money invested in PPF will be yours forever.
Who Can Invest?
Any resident Indian and individuals on behalf of minors with minimum initial deposit of Rupee Five Hundred can open PPF account. Previously, Hindu Undivided Family (HUF) & Non-Resident Indians (NRIs) were allowed to open PPF account but now law prohibits HUF, NRI from opening such accounts.
If you want a safe corpus, a decent rate of return, total tax benefits and have a long term investment plan, then the PPF is for you. Today the PPF has become India’s one of the most popular risk free investment instrument.