PPF India 2026 — 7.1% Rate, EEE Tax, ₹1.5L Limit, Maturity Calculator
PPF (Public Provident Fund) is a long-term tax-free government savings scheme launched in 1968, with a 15-year tenure (extendable in 5-year blocks), Exempt-Exempt-Exempt (EEE) tax treatment, and interest set quarterly by the Government of India.
2 min read · Updated June 2026
Contribution: minimum ₹500 per financial year, maximum ₹1.5 lakh per financial year (combined across all PPF accounts in one's name, including those of minor children). Up to 12 deposits per year. Interest rate reset quarterly by Ministry of Finance — 7.1% for most quarters since Q1 FY 2020-21 through FY 2025-26 (carried over into FY 2026-27 in indicative quarterly notifications). Interest is compounded annually but calculated on the LOWEST balance between the 5th and last day of each month — so deposits before the 5th of the month earn full interest for that month.
Tax treatment (EEE — Exempt-Exempt-Exempt): (1) Contributions deductible under Section 80C up to ₹1.5 lakh per FY (combined with EPF, ELSS, NPS, LIC premium, home loan principal, etc. — single combined limit). (2) Interest credited each year is fully tax-free. (3) Full corpus at maturity is tax-free. The 80C deduction is available only under the OLD tax regime; under the new regime, you lose the deduction but the interest and maturity are still EE — so PPF still works for tax-free growth in new regime, just without the contribution-side deduction.
Worked maturity examples (assuming 7.1% interest compounded annually): ₹1,000/month (₹12,000/year) for 15 years → corpus ~₹3.25 lakh on ₹1.80 lakh invested. ₹5,000/month (₹60,000/year) for 15 years → corpus ~₹16.27 lakh on ₹9.0 lakh invested. ₹12,500/month (₹1.5L/year — the maximum) for 15 years → corpus ~₹40.68 lakh on ₹22.5 lakh invested. Extending to 25 years at maximum contribution → corpus ~₹73 lakh. Extending to 35 years at maximum contribution → corpus ~₹1.27 crore. Use the PPF Calculator at /in/tools/ppf-calculator to model your specific contribution pattern.
Tenure, extension, and exit: original tenure 15 financial years (15 + the FY in which you opened the account — so account opened in FY 2025-26 matures at end of FY 2040-41). After 15 years, you have three choices: (1) Close with full tax-free withdrawal of corpus. (2) Extend by 5-year blocks WITH new contributions (file Form H within 1 year of maturity at the bank/post office). (3) Extend WITHOUT new contributions — corpus continues to earn interest, can withdraw partially once per year; no Form required, default option. Premature closure allowed after 5 years for medical treatment, higher education, or NRI status change — with a 1% interest penalty (interest paid 1% lower than rate notified for the period).
Partial withdrawal and loan: (1) Partial withdrawal allowed from the 7th financial year onwards. Maximum 50% of the balance at the end of the 4th preceding year OR end of preceding year, whichever is lower. Only one withdrawal per FY. Withdrawal is tax-free. (2) Loan facility from 3rd to 6th year (between 3rd and 6th anniversary of opening). Maximum loan = 25% of balance at end of 2nd preceding FY. Repayable in 36 months. Interest on loan = 1% above the PPF rate, payable lump-sum at repayment. After repaying, you can take a fresh loan within the same window.
Common queries: (1) Multiple PPF accounts — illegal. Only ONE account per person allowed (excluding minor children's accounts opened by guardian). Penalty for multiple: only the first account earns interest; the duplicate account is treated as 'irregular' and interest is reversed. (2) Minor child PPF — guardian can open one PPF account per minor child, but the ₹1.5 lakh cap is COMBINED across guardian's own + minor children's accounts. (3) NRIs — cannot open new PPF; existing PPF can continue till maturity (15 years) but NOT extendable. (4) Joint accounts — not allowed; PPF is single-holder only. (5) Nomination — mandatory; up to 4 nominees with percentage shares.
PPF vs ELSS vs NPS — which to pick for 80C: PPF gives guaranteed 7.1% tax-free over 15 years — zero market risk, suited to capital preservation. ELSS gives potential 11-14% (equity returns) with a 3-year lock-in but full market risk. NPS gives 9-13% (equity-heavy lifecycle blends) with lock-in till 60 + mandatory 40% annuity at exit. A typical allocation for a 30-year-old salaried investor maximising 80C: ₹50,000 PPF (safety + tax-free) + ₹1 lakh ELSS (equity growth + shortest lock-in) = ₹1.5 lakh cap utilised. PLUS ₹50,000 NPS Tier 1 for the exclusive 80CCD(1B) deduction = ₹2 lakh total deductions in old regime.
PPF can be opened at SBI, post offices, and most public/private banks. Only one PPF account per person legally allowed (excluding minor children's accounts). Contribution before 5th of the month earns full interest for that month. NRIs cannot open new PPF; existing accounts continue till maturity but cannot be extended.
