The PPF is a government-backed investment scheme, which is currently offering an annualised return of 7.1 per cent. The Public Provident Fund is also popular for Exempt-Exempt-Exempt (EEE) tax status. It means, investments of up to Rs 1.5 lakh annually are deductible from your taxable income, the interest earned on the PPF is tax-free, and the maturity proceeds, including the principal and interest, are also exempt from taxation. Let’s find out how you can generate Rs 1.2 lakh/month tax-free income from PPF and how long it will take for you to reach this goal. 

Public Provident Fund withdrawal limit

You can withdraw up to 50 per cent of the balance at the end of the 4th preceding year or the end of the preceding year, whichever is lower.
For example, if you are making a withdrawal in the financial year 2024-25, you can withdraw up to 50 per cent of the balance as of March 31, 2023, or March 31, 2024, whichever is lower.

What happens to your PPF account after 15 years?

After completing the initial 15-year maturity period, you have the flexibility to manage your Public Provident Fund (PPF) account as follows:
You can choose to continue your account with or without making further deposits.
This allows you to extend the benefits of your PPF account beyond the initial maturity period.

How to get Rs 1.2 lakh/month income from PPF?

To generate Rs 1.2 lakh per month from a PPF, you have to begin with an investment of Rs 1.50 lakh every year and continue it until the 15-year maturity period. Later, you can extend the account for blocks of 5 years each for maximum return. 

What will be PPF corpus after 15 years?

 The investment amount in 15 years will be Rs 22,50,000, the estimated interest will be Rs 18,18,209, and the estimated maturity will be Rs 40,68,209. The investor can take an extension of 5 years and keep investing Rs 1.50 lakh a year in the same way as before.

What will be PPF corpus after 20 years?

In 20 years, the total investment will be Rs 30,00,000, the estimated interest will be Rs 36,58,288, and the estimated corpus will be Rs 66,58,288. At this stage, the investor can take another extension of 5 years and continue the practice of investing Rs 1.50 lakh a year. 

What will be PPF corpus after 25 years?

In 25 years, the total investment will be Rs 37,50,000, the estimated interest will be Rs 65,58,015, and the estimated corpus will be Rs 1,03,08,015.

What will be PPF corpus after 29 years?

In 29 years, the total investment will be Rs 99,26,621, the estimated interest amount will be Rs 99,26,621, and the estimated corpus will be Rs 1,42,76,621. 

What will be PPF corpus after 34 years?

In 34 years, the total investment will be Rs 51,00,000, the estimated interest will be Rs 1,59,43,144, and the estimated corpus will be Rs 2,10,43,144..

What is next step after 34 years of investment?

From here onwards, account holders can start withdrawing interest on the entire corpus. During extensions, the account holder is allowed to withdraw the interest amount once a year.  

What will be your interest amount?

At a 7.1 per cent interest rate, the interest in a year will be Rs 17,53,595, which is equal to Rs 1,24,505 a month.

How many years will it take to build Rs 1.2 lakh/month tax free income from PPF?

It will approximately take 34 years to reach this target corpus.

Also Read: Rs 5,000 SIP Vs Rs 5,00,000 Lump Sum: Which can generate a higher corpus in 30 years?