PPF Account: The Secret to Building Wealth with Zero Risk & Full Tax Exemption

Kuldeep Singh Chundawat

For investors seeking safe, long-term, and tax-efficient returns, the Public Provident Fund (PPF) remains one of the most reliable government-backed investment options. Falling under the EEE (Exempt-Exempt-Exempt) category, PPF offers tax-free contributions, interest, and maturity payouts—making it ideal for wealth creation.

With strategic planning using the 15+5+5 extension rule, investors can accumulate a corpus of ₹1 crore and enjoy ₹60,000 monthly tax-free income, all while avoiding market risks.

Maximize Returns with the 15+5+5 Rule

The standard PPF tenure is 15 years, but what many investors overlook is the flexibility to extend it twice, for 5 years each, with or without fresh contributions. This long-term approach harnesses the power of compounding to create a substantial retirement corpus.

Year 1–15: By investing ₹1.5 lakh annually, the fund grows to ₹40.68 lakh.
Year 16–25 (with extension): Continued investment leads to a total corpus of ₹1.02 crore, assuming a 7.1% annual interest rate.

This strategy allows investors to build a ₹1 crore fund by simply being consistent over 25 years.

Monthly Income of ₹60,000 — Tax-Free

After completing the 25-year accumulation phase, investors can extend the PPF for another 5 years without contributions. During this time:

The accumulated ₹1.02 crore earns 7.1% annual interest, generating approximately ₹7.31 lakh annually.
Divided monthly, this amounts to about ₹60,941 per month, tax-free.
Investors can withdraw once annually, giving flexible access to income without eroding capital.

This creates a stable, tax-free retirement income, backed by sovereign guarantee.

Secure, Government-Regulated & Market-Risk Free

PPF is regulated by the Government of India, with interest rates revised quarterly. The current interest rate stands at 7.1% per annum, offering strong returns without any exposure to stock market fluctuations.

Minimum deposit: ₹500 annually
Maximum deposit: ₹1.5 lakh annually
Frequency: Up to 12 installments in a financial year

This makes PPF accessible for both salaried individuals and small investors.

Additional Benefits: Loan Facility in Emergencies

PPF also offers liquidity through loan facilities between the 3rd and 6th financial year:

Loan amount: Up to 25% of account balance
Interest rate: Just 1% above prevailing PPF interest rate
No need to break your long-term plan during emergencies

This ensures financial flexibility even in unforeseen circumstances.

Why PPF Remains a Cornerstone of Indian Financial Planning

Public Provident Fund is one of the few instruments that provide guaranteed returns, tax exemption, and long-term growth all in one. With strategic use of its extension and withdrawal features, it can serve as both a retirement fund and a monthly income source post-retirement.

Whether you’re just starting your career or planning for retirement, the PPF account provides financial discipline, security, and tax savings—hallmarks of a strong personal finance strategy.

Author Profile

Kuldeep Singh Chundawat: My name is Kuldeep Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.