Contribution to Statutory Provident Fund/Public Provident Fund/Recognised Provident Fund

Question 1:      Who are eligible for this deduction?

Answer:              Resident Individual, His Spouse & any children of spouse & any member in case of HUF.

Question 2:      What is the maximum amount of deduction?

Answer:              The maximum amount of deduction is Rs. 1,50,000 in a year.

Question 3:      What is the amount of deposit under PPF?

Answer:              Minimum amount deposit under PPF is Rs. 500 & Maximum amount deposit is Rs. 1,50,000.

Question 4:      Is interest received on PPF exempt?

Answer:               Yes, Interest received on PPF will be exempt.

Question 5:      What is the Interest Rate?

Answer:              Interest rate is 7.1% (Approximately).

Question 6:      Whether Interest Rate is compounded annually?

Answer:              Yes.

Question 7:      Whether we can transfer PPF A/C to another person?

Answer:              No, We can’t transfer the PPF A/C to another person.

Question 8:      What is the maturity period of PPF?

Answer:               Maturity Period is 15 Years.

Question 9:      Can I have 2 PPF A/C?

Answer:             No, You can have only one PPF account in your name.

Question 10:    What is the mode of deposit in PPF?

Answer:            Deposit in PPF A/C can be made through Cash, Bank, and Demand Draft & Online Fund Transfer.

Question 11:    Can we have open PPF A/C in Joint Name?

Answer:           No, You can’t open PPF A/C in Joint Name but    you can nominate one or more individuals.

Question 12:    How we can withdraw from PPF A/C?

Answer:              You can withdraw on Maturity & Entire amount will be Tax Free. In case of financial crisis account holder can withdraw after completing of 5th years.  Amount eligible for withdrawal is the lower of: (a) 50% of the PPF Account Balance at the end of the F.Y, preceding the current year, or 50% of the PPF Account Balance at the end of 4th F.Y, preceding the current year.

Investment in NSC

Question 1:       Who can Investment in NSC?

Answer:               Resident Individual can invest in NSC.

Question 2:       What is amount of deduction?

Answer:              Maximum deduction u/s 80C is Rs. 1,50,000 for

                              NSC Purchase & NSC Interest accrued.

Question 3:       What is amount of Investment?

Answer:            Minimum amount deposited is Rs. 100 & there    is no limit on maximum amount to invest.

Question 4:    Whether interest received on maturity will be taxable in NSC?

Answer:               Yes it will be taxable.

Question 5:       In which denomination we can purchase

                               NSC?

Answer:              It can be purchased in denomination of Rs.100, Rs. 500, Rs. 1,000, Rs, 5,000 & Rs. 10,000.

Question 6:       From where we can purchase NSC?

Answer:               NSC can be purchase from Post Office.

Question 7:       What is the Interest Rate on NSC?

Answer:   Interest Rate on NSC (VIII Issue) is 6.8%(Approximately) & Interest Rate is Compounded Annually.

Question 8:      Whether TDS will be deducted on Interest?

Answer:              No, TDS will not be deducted on Interest.

Question 9:      What is the lock in period?

Answer:              Lock in period is 5Years.

Investment in Post Saving Time Deposit Account

Question 1:      Who are eligible for this deduction?

Answer:              Individual is eligible for this deduction.

Question 2:      Which scheme is eligible for deduction?

Answer:        There are various scheme in Post Office Time   Deposit like 1,2,3 & 5 Years but 5 Years Time Deposit only qualifies for deduction u/s 80C.

Question 3:      What is the lock in period?

Answer:              Lock in period is 5 Years.

Question 4:      What is the amount of deduction u/s 80C?

Answer:              Deduction u/s 80C is Rs. 1,50,000.

Question 5:      What is the Interest Rate ?

Answer:              Interest Rate is 7% (Approximately).

Question 6:      Whether Interest is Taxable or Exempt?

Answer:              Interest is Taxable.

Conclusion:    From the above mentioned content to invest in PPF is better for long term if there is no financial crisis because Principal Amount Invest & Interest both are exempt. You are also go for NSC & Post Office Fixed Term Deposit.

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