Tax Saving Tips: The financial year 2022-23 is about to end and all taxpayers are trying to invest before March 31, 2023 to save tax. In such a situation, the question is going on in everyone’s mind that where to invest, where investment can get excellent returns and tax liability can also be avoided. Investing in ELSS or ULIP can be risky as mutual funds and insurance companies invest the money deposited in these schemes in the stock market and the returns you get will depend on the stock market trend. In such a situation, Public Provident Fund (PPF) can prove to be the best option for you in terms of saving tax and getting better returns.
PPF is a government scheme
The biggest feature of Public Provident Fund (PPF) is that being a government scheme, the government guarantees the returns on it. The government fixes the interest rates on PPF before every quarter of the financial year. At present, 7.1 percent interest is being received annually on PPF. But in 2015-16, PPF used to get 8.7 percent interest. But after this, there has been a continuous reduction in the interest rates of PPF. PPF investors have had to bear the brunt of the reduction in interest rates. Despite this, investors continue to trust PPF to save tax and get better returns. You can also become a millionaire by investing in the scheme in PPF. Even if the money deposited in PPF is not invested in the stock market. Despite this, this guaranteed return scheme can make you a millionaire.
Benefit of tax exemption on investment also
Under 80C of the Income Tax Act, tax exemption is available on an investment of Rs 1.50 lakh annually. And a maximum of Rs 1.50 lakh can be invested in PPF in a financial year. In such a situation, if you invest Rs 1.50 lakh in PPF, you can take advantage of tax exemption.
Long term investment possible!
You can invest up to Rs 1.5 lakh annually in a PPF account, which can be done on a monthly or quarterly or yearly basis. Investors can invest in PPF account continuously for 15 years. And if the investor does not need the money, then he can also extend his PPF account after 15 years on the basis of a block period of five years, thus he can reach the age of 35 years. You can invest in PPF for years. For this only PPF account submission form has to be filled.
PPF can make a millionaire
If someone is 25 years old and continues to invest Rs 1.5 lakh annually in PPF account till the age of 60 years of retirement i.e. for the next 35 years, then he will get a total of Rs 2.27 crore. In which Rs 52,50,000 will be your investment, on which Rs 1,74,47,857 will be received as interest, on which no tax will have to be paid.