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Can court take away PPF benefits? The answer may surprise you

Amitava Chakrabarty
PPF, Public Provident Fund, lesser-known benefits of PPF, tax-saving investment, EEE tax benefits, Sovereign Guarantee, tax-free interest, tax-free maturity, 80C benefits, Income Tax Act, protection against attachment

Public Provident Fund (PPF) is known for its EEE tax benefits, higher returns and Sovereign Guarantee by the Government of India. However, there are many other lesser-known benefits of PPF, one of which is that the PPF money is immune to even court orders.

The most attractive part of PPF is its tax benefit, which makes it a favoured mode of investment among people looking to save tax. The money invested in PPF is eligible for deduction u/s 80C of the Income Tax Act up to the statutory limit in a financial year, which is now Rs 1,50,000. A PAN card holder may invest up to Rs 1.5 lakh in a financial year for self and minor children taken together.

However, if total investments exceed the statutory limit in a financial year, the investors will not be entitled to get any interest on the excess amount, which may be withdrawn any time as lock-in provisions don’t apply on excess investments.

Apart from the 80C benefits, the interest on PPF and the maturity amount are also tax free, which makes it an ideal tax-saving investment of the Exempt, Exempt, Exempt (EEE) category.

Another major attraction is that the investments are fully secure as PPF enjoys Sovereign Guarantee from the Government of India and hence the money invested can’t go waste even if the organisation through which investments are made turns bankrupt.

Along with the excellent security, the rate of interest on PPF is the highest among the guaranteed return category. The rate of interest is declared by the government on quarterly basis.

So, high interest coupled with overall tax benefits and complete security makes PPF an ideal choice among risk-averse investors, especially for tax-saving purpose.

Apart from Sovereign Guarantee, another little-known, but very important aspect is that the money accumulated in the PPF account also enjoys protection against attachment and can’t be attached under any decree or order of any court in respect of any debt or liability incurred by the subscriber.

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Hence, in case of payment of business liabilities or to pay alimony to spouse in case of marital dispute or to settle a divorce case etc, if a person doesn’t have enough money, his/her immovable and or movable properties, including bank balances and investments, may be attached in case of shortage of money, but a court can’t attach his/her amount standing to the credit of the PPF account.

So, not only the investment enjoys benefit of Sovereign Guarantee, but the money accumulated in your PPF account can’t be parted from you even by a court order.