Investing ₹500 monthly means ₹6,000 yearly in PPF. Your 15-year maturity: ₹1,62,730 tax-free.
| Year | Deposit | Interest | Balance |
|---|
Investing ₹500 per month (totaling ₹6,000 per year) in PPF at 7.1% gives you a maturity of ₹1,62,730 after 15 years — all completely tax-free.
| Tenure | Total Deposited | Interest Earned | Maturity Value |
|---|---|---|---|
| 15 Years | ₹90,000 | ₹72,730 | ₹1,62,730 |
| 20 Years | ₹1,20,000 | ₹1,46,334 | ₹2,66,334 |
| 25 Years | ₹1,50,000 | ₹2,62,324 | ₹4,12,324 |
| 30 Years | ₹1,80,000 | ₹4,38,042 | ₹6,18,042 |
| 35 Years | ₹2,10,000 | ₹6,97,922 | ₹9,07,922 |
If you invest ₹6,000 per year in PPF at 7.1% for 15 years, your maturity value will be ₹1,62,730. This includes ₹90,000 total deposits and ₹72,730 in tax-free interest.
Deposits up to ₹1,50,000 per year qualify for Section 80C deduction. If you are in the 31.2% tax bracket (highest old regime), you can save approximately ₹1,872 in taxes every year.
To invest ₹6,000 per year in PPF, you need to set aside approximately ₹500 per month. You can make deposits in up to 12 installments per financial year.
After the initial 15-year lock-in, you can either withdraw the entire amount tax-free, or extend it in blocks of 5 years (with or without fresh contributions). The extended period also earns the prevailing PPF interest rate.
At 7.1% tax-free return, PPF significantly outperforms FDs for long-term investment. A comparable FD would need to offer 10.3% pre-tax returns (for 31.2% tax bracket) to match PPF's after-tax return. Over 15 years, this compounding advantage is substantial.