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You Can Deposit Over Rs. 1.5 Lakh In PPF A/c: But Know This Rule Before

Roshni Agarwal

Many of you given the rising interest rate regime on small saving schemes may be inclined to save higher in PPF account i.e. higher than the otherwise maximum limit of Rs. 1.5 lakh in a financial year. Notably, to keep the account running, you need to invest a minimum of Rs. 500 per year plus there exist an upper end limit of Rs. 1.5 lakh year for an individual investor who maintains the PPF account. The same holds true for an investor who also maintains the PPF account in the name of his or her minor child i.e. the highest investment limit is set at Rs. 1.5 lakh in a financial year.

But interestingly, while this might come as a surprise for you, you can still deposit over this threshold value but investment experts advice doing away from such a thing and instead scout out for other lucrative investment options such as equity and other saving schemes.

This is because an investment over Rs. 1.5 lakh channelized into PPF account will neither earn you interest rate nor will offer you any tax rebate under the Income tax Act.
It is to be noted that interest against your deposits in PPF are compounded annually and interest is credited on a lump sum basis on March 31, 2018 as per the information posted by SBI.

Plus, interest rate is computed on a monthly basis on the minimum balance in the account between 5th and last day of every month.

Also, note apart from being totally tax-free and classified as EEE investment, the outstanding amount to the credit of the account also does not arise any wealth tax implication.

Currently, the PPF earns a high rate of interest of 8% p.a. for the October-December quarter of FY19.

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