Public Provident Fund (PPF) investors looking to contribute to their account before April 5 and avail full-year interest should make the deposits online to avoid delays this year, as the department of posts has declared April 1 and 2 as "no transaction" days.
No cheques will be accepted on the two days, an India Post note accessed by Moneycontrol said. The move is on account of year-end closing activities, officials manning the Mumbai GPO helpline told Moneycontrol.
Staff salary and pension uploads will be processed by late evening on April 2. As a result, pension payments will be available only on April 3, the communication said.
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While delay in execution of transactions affects all post office small saving customers, PPF depositors stand to lose the most if they do not complete the exercise before April 5. This is because under the PPF rules, interest is calculated every month on the monthly balance in the account between the 5th and the last day of the month. So investing at the beginning of the year, before April 5, will help you maximise your interest earnings. However, you can complete the transactions through India Post Payments Bank (IPPB) or banks that allow online investments in PPF.
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At present, you can invest up to Rs 1.5 lakh in PPF, which carries an interest rate of 7.1 percent a month. PPF comes with an E-E-E (exempt-exempt-exempt) structure. That is, the contribution that you make qualifies for deduction under section 80C, subject to the overall limit of Rs 1.5 lakh. Moreover, the interest that you accumulate during the investment tenure and the amount that you receive on maturity are also exempt from tax, making it an attractive instrument in your debt armour.
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