Public Provident Fund (PPF) is a long-term wealth creation investment instrument in India offering secure returns and tax benefits with a 15-year tenure and possible extensions.
Investors can contribute between Rs 500 and Rs 1.5 lakh per financial year in a PPF account, with the funds earning compound interest over time, and the maturity amount being tax-free.
PPF provides 'EEE' (Exempt-Exempt-Exempt) tax benefits where contributions, interest earned, and maturity amount are all exempt from tax, making it suitable for long-term financial planning for goals like retirement.
To build a Rs 2-crore corpus through PPF with a 7.1% annual return, investors need to contribute Rs 1.5 lakh yearly for 35 years, resulting in a total investment amount of Rs 52.5 lakh and accumulating a tax-free amount of Rs 2.27 crore.