PPF Calculator 2026

What is the Public Provident Fund (PPF)?

The Public Provident Fund (PPF) is a popular long-term saving scheme backed by the Government of India. Introduced in 1968 by the National Savings Institute, its primary objective is to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits. For over five decades, PPF has been the cornerstone of retirement planning for risk-averse Indian investors.

The 'EEE' Tax Status Explained

PPF is one of the few financial products in India that enjoys the prestigious Exempt-Exempt-Exempt (EEE) tax status. This makes it incredibly tax-efficient, particularly for individuals in the highest (30%) tax bracket.

• Exempt (Investment): The amount invested in PPF is deductible under Section 80C up to ₹1.5 lakh per financial year.
• Exempt (Interest): The interest earned annually is entirely tax-free.
• Exempt (Maturity): The final maturity amount withdrawn after 15 years (or extended periods) is completely exempt from tax.

PPF Rules: Withdrawals, Loans, and Extensions

Partial Withdrawals

While PPF has a strict 15-year lock-in period, liquidity is provided through partial withdrawals. You are eligible to make one partial withdrawal per financial year starting from the 7th financial year. The maximum amount you can withdraw is capped at 50% of the account balance at the end of the 4th preceding year or the end of the immediately preceding year, whichever is lower.

Loan Against PPF

If you need funds before the 7th year, you can avail a loan against your PPF balance between the 3rd and 6th financial year. You can borrow up to 25% of the balance present at the end of the second preceding year. The interest charged on this loan is only 1% above the prevailing PPF rate, making it one of the cheapest personal loan options available.

Premature Closure

Since 2016, the government allows premature closure of PPF accounts after completing 5 full financial years, but only for specific reasons such as the treatment of a serious ailment or life-threatening disease of the account holder, spouse, or dependent children, or for higher education. This comes with a 1% penalty on the interest rate applied retroactively from the date of account opening.

PPF Extension After 15 Years

When your PPF account matures after 15 years, you don't necessarily have to close it. You can extend it in blocks of 5 years indefinitely. You have two options:

1. Extension without contribution: Your corpus continues to earn interest at the prevailing rate. You can make one withdrawal per financial year of any amount.
2. Extension with contribution: You continue investing up to ₹1.5L yearly. In this option, you can withdraw only up to 60% of the balance at the time of the start of the extension block.

PPF vs FD vs ELSS: Which is Best?

Comparing PPF with Fixed Deposits (FD) and Equity Linked Savings Schemes (ELSS) is crucial for asset allocation.

• Safety: PPF and Bank FDs are highly secure, while ELSS is subject to market volatility (equity risk).
• Taxation: PPF is tax-free (EEE). FD interest is taxed at your slab rate. ELSS gains above ₹1.25 Lakh are taxed at 12.5% LTCG.
• Lock-in: PPF has a 15-year lock-in. Tax Saver FDs lock for 5 years. ELSS has the shortest lock-in of just 3 years.

For long-term, zero-risk wealth creation—especially for your debt portfolio allocation—PPF remains unmatched due to its tax efficiency.

PPF For Minors

A parent or guardian can open a PPF account on behalf of a minor child. This is an excellent way to guarantee a tax-free corpus for their higher education or marriage. Note that the maximum combined contribution across the parent's account and the minor's account remains capped at ₹1,50,000 per financial year to qualify for Section 80C.

Disclaimer: Calculations provided are for illustrative purposes. Always consult a certified financial planner for tax advice and investment decisions.