How ₹1.5 Lakh/Year in PPF Can Give You ₹1 Lakh/Month Tax-Free – Here’s the Simple Math

The Public Provident Fund (PPF) is a safe and guaranteed way to save money. It is backed by the Government of India, so your money is secure, and the returns are assured. If you invest ₹1.5 lakh every year in PPF, you can build a big amount over time and one day earn ₹1 lakh per month from it, completely tax-free.

What is PPF?

PPF is a long-term savings plan. You can open a PPF account with just ₹500, but you can invest up to ₹1.5 lakh per year. You get three tax benefits:

• Your investment is tax-free,
• The interest you earn is tax-free,
• The money you get at the end is also tax-free.

You can open this account even for your child. The lock-in period is 15 years, but you can keep it going in blocks of 5 more years after that.

Can You Take Out Money Early?

Yes, but only after 5 years. You can withdraw once a year, and only up to 50% of your earlier balance. So it’s not meant for short-term use.

How to Earn ₹1 Lakh/Month from PPF?

If you invest ₹1.5 lakh every year and continue for many years, your money will grow with interest. Here’s what happens:

After 15 years:

• You invest ₹22.5 lakh
• You earn interest of ₹18.18 lakh
• Total = ₹40.68 lakh

After 20 years:

• You invest ₹30 lakh
• You earn ₹36.58 lakh
• Total = ₹66.58 lakh

After 25 years:

• You invest ₹37.5 lakh
• You earn ₹65.58 lakh
• Total = ₹1.03 crore

After 30 years:

• You invest ₹45 lakh
• You earn ₹1.09 crore
• Total = ₹1.54 crore

After 33 years:

• You invest ₹49.5 lakh
• You earn ₹1.45 crore
• Total = ₹1.95 crore

What Happens After 33 Years?

After 33 years, you can stop adding money and start withdrawing the interest every year. At 7.1% interest, you will get around ₹16.25 lakh per year that’s about ₹1.15 lakh per month, tax-free.

Final Thought

PPF is slow but steady. If you invest regularly and stay patient, it can help you build a large, safe, and tax-free monthly income for your future perfect for retirement.