The Power of PPF Extensions
Most investors withdraw their PPF corpus after 15 years. However, the real wealth is built in the extension blocks (5 years each).
By extending, you continue to earn tax-free interest on your accumulated corpus. Even if you don't contribute fresh money, your existing balance grows at 7.1% tax-free, which is tough to beat with any safe debt instrument.
Extension Rules
- With Contribution: You must submit Form H within 1 year of maturity. You can contribute up to ₹1.5 Lakh/year and claim 80C deductions.
- Without Contribution: Default option if no form is submitted. You earn interest on the balance but cannot deposit fresh funds. You can withdraw any amount once per financial year.
Comparison: PPF vs ELSS vs FD
| Feature | PPF | ELSS |
|---|---|---|
| Returns | ~7.1% (Fixed) | ~12-15% (Variable) |
| Taxation | EEE (Tax Free) | LTCG > 1.25 Lakh |
| Lock-in | 15 Years + Ext | 3 Years |
Disclaimer
Educational Use Only: This tool is meant for estimation purposes. Actual returns may vary based on market conditions and expense ratios.
We are not a SEBI-registered advisory. Please consult your CA or financial advisor before investing.