
PPF deposit: You can earn this much EXTRA tax free interest on PPF by depositing before April 5
Public Provident Fund (PPF), especially those who have opted for the new tax regime in FY 2025-26. The new tax regime has become more attractive than the old tax regime for a large number of taxpayers, as the new regime allows for zero tax payable on income of up to Rs 12 lakh. However, you must not forget that the interest income from PPF investments, as well as the maturity amount, are exempt from taxes. Your PPF investments should, therefore, continue at the maximum level permitted (Rs 1.5 lakh per FY), even if you opt for the new tax regime for FY 2025-26. This will help you earn tax-free interest while also keeping the PPF account active.
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Income Tax Slabs FY 2025-26
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New Income Tax Bill 2025
To maximise the interest earned, ensure that the entire investment in PPF (allowed for the FY) is made as a lump sum investment in the PPF account on or before April 5. Similarly, in case you are investing on a monthly basis (and not lump sum) note that a contribution to a PPF account should be made on or before the 5th of every month. Depositing before this date will help you earn more interest on your PPF investments.
What PPF scheme rules say about interest calculation?
The interest on a PPF account balance is calculated on the lowest balance maintained in the account between the 5th of each month and the end of the month. Those contributing a lump sum to their PPF should ensure that the deposit is made before April 5 to have the amount counted in the interest calculations for the entire month of April.