Government Scheme PPF: Many people dream of becoming a millionaire, but due to lack of proper planning and investment, not everyone is able to achieve it. If you also want to secure your future and dream of becoming a millionaire, then Public Provident Fund (PPF) can be a great option for you. By investing in PPF for a long time, you can create a corpus of more than Rs 1 crore in 25 years.
Invest Rs 12,500 every month
If you deposit Rs 12,500 every month in PPF account and invest it continuously for 15 years, then on maturity you will get a total of Rs 40.68 lakh. Out of this, your total investment will be Rs 22.50 lakh and you will get additional income of Rs 18.18 lakh in the form of interest. This calculation has been done on the basis of annual interest rate of 7.1%. Note that the government revises the interest rate in PPF every quarter. Due to this the maturity amount may change.
How to become a millionaire in 25 years?
If you want to become a millionaire through PPF, then you will have to increase your account twice after 15 years for 5 years each. That means your investment time will be 25 years. During this period, your total investment will be Rs 37.50 lakh and your interest income will be Rs 65.58 lakh. In this way, you will get a total of Rs 1.03 crore in 25 years. But keep in mind that if you want to extend your PPF account after 15 years, you will have to apply one year before maturity. If you do not request an account extension in time, it will not be extended.
Benefits of tax exemption on PPF
The biggest advantage of PPF is that it provides tax exemption on investment, interest and maturity amount.
Under Section 80C of Income Tax, you can avail tax exemption on investments up to Rs 1.5 lakh every year.
There is no tax on the interest received on PPF.
This scheme is completely safe because it is promoted by the government.
Why invest in PPF?
Safe investment for long term: PPF is among the small savings schemes and is supported by the government.
Benefit of tax exemption: Tax exemption is available on investment and interest.
benefit of compounding: Interest is paid on the basis of compounding, which results in higher returns on your investment.
fund for the future: With a 25 year plan, you can easily create a corpus of Rs 1 crore.