PPF is a good investment option if you are looking for an investment tool where you can contribute regularly and save money for the future of your family. The scheme also lets you avail tax benefits. Read more to know where we unfold how PPF schemes can be one of the best options for tax savings for you.
Understanding PPF
Public Provident Fund or PPF is a government-backed scheme that currently offers an interest rate of 7.10% p.a. (as of August 2025). In this scheme, you can deposit money at regular intervals and build a corpus over time for goals like retirement, your child’s marriage, travel plans, or buying a home.
PPF offers favourable returns, tax benefits and with its risk-averse nature, it has become a preferred option among investors in India.
Having been enrolled in a PPF scheme provides an interest rate that compounds annually with the maturity amount, which is inclusive of accrued interest and is exempt from taxation. Moreover, the contributions made to a PPF account qualify for tax deductions under Section 80C of the Income Tax Act.
Key Benefits of Having a PPF Account
The following benefits make PPF a suitable investment option for you,
- Long-Term Financial Commitment
A PPF account comes with a lock-in period of 15 years, making it a reliable option for long term savings. It is a good way to grow your money while keeping it safe in a separate investment account.
- Low Risk
Because PPF is supported by the government, it is a safe option that provides returns that are assured without the volatility of market risks.
- Partial Withdrawals
PPF accounts also allow partial withdrawals. It means that when you open a PPF account and want to opt for a partial withdrawal, you can do it after completing five full financial years. The withdrawal also has a limit; for example, you can withdraw 50% of the balance at the end of the fourth financial year preceding the withdrawal year, or 50% of the balance at the end of the financial year before the withdrawal year, whichever is lower.
- Availability of Loans
You can also avail a loan against your PPF account. Loan facility is available between the 3rd financial year and the 6th financial year of your PPF account. This feature helps manage your urgent fund needs.
- Opportunities for Extension
After your PPF account completes its initial 15-year maturity period, you don’t have to close it. You can extend the account for additional 5-year blocks and keep earning interest and tax-free returns, allowing your money to continue growing through compounding.
Eligibility to Open a PPF Account
- A PPF account can only be opened by Indian citizens.
- Only one person can be the PPF account holder, though it can be opened in the name of a minor by a guardian.
- A minor’s PPF account can be opened by their parents or legal guardians.
- Note that NRIs are not allowed to open a new PPF account. In case a person becomes an NRI after opening a PPF account, they may continue till maturity, but cannot extend it beyond 15 years.
Documentation Needed for a PPF Account
- KYC documents such as your Aadhar card, passport, or driving license.
- Utility bills, bank statements or a rental agreement for address verification.
- Provide the latest passport-sized photos.
- Complete PPF application form provided by the bank.
Tax Benefits of a PPF Account
Read the key tax benefits of investing in a PPF account in India:-
- Deduction on Contributions (Section 80C)
The amount you invest in PPF can be claimed as a deduction under Section 80C of the Income Tax Act. You can claim up to ₹1.5 lakh in a financial year, but this benefit is only available under the old tax regime. Under the new regime, this deduction is not applicable.
- Tax-Free Interest
Another big advantage is that the interest earned on your PPF account is tax-free, provided your annual contribution is up to ₹5 lakh. For deposits made on or before 1st April 2021, the entire interest amount remains fully exempt.
PPF enjoys EEE (Exempt-Exempt-Exempt) status under both regimes, meaning your contributions, interest earned and maturity proceeds are all exempt from tax, making it one of the most tax-efficient investment choices.
How to Open a PPF Account Offline?
- Visit the Branch: Go to the ICICI Bank branch to get the account opened.
- Get the Form: Ask for a PPF account opening form.
- Fill It Out: Complete the form with your details and choose how much you want to invest.
- Submit Documents: Hand over your identity proof, address proof and the filled form.
- Make Initial Deposit: Pay the initial amount required.
How to Open a PPF Account Online?
You can open a PPF account at ICICI Bank using Net Banking or the iMobile app.
Using Net Banking
- Log on to your ICICI Bank Internet Banking account.
- Go to Investments > PPF Account Online > Open a PPF Account.
- Fill in the required details, including the deposit amount, nominee, and standing instructions.
- Provide consents, and click Proceed.
- You will be redirected to the NSDL page for Aadhaar authentication.
- Complete the e-signing and submit your application.
Using the iMobile App
- Log on to iMobile.
- Go to Invest > PPF.
- Read the declaration, check the box, and tap Let’s Get Started.
- Fill in all your details (amount, nominee, standing instructions).
- You will be redirected to the NSDL page for Aadhaar authentication.
- Complete the e-signing and submit your application.
Conclusion
PPF is more than just a tax-saving option as it is a safe and reliable way to secure your financial future. With assured returns, government backing and long-term wealth creation, it offers peace of mind along with tax benefits.
Starting your tax-saving journey with PPF each year ensures discipline, stability, and growth in your finances. It not only reduces tax burden but also builds a financial corpus.
