Thinking of Investing in PPF? Don't Miss This Crucial Limit!
PPF is one of India’s safest, tax-saving investment tools. But if you don't understand the PPF limit per year, you could lose tax benefits and interest!
Let's decode it properly so you maximize every rupee.
You can invest up to ₹1.5 lakh per year in a PPF account. This limit is per person per financial year (April 1 to March 31). Any amount above the limit does not earn interest and is refunded without tax benefit.
What is the PPF Scheme?
Launched in 1968 by the Government of India, the Public Provident Fund (PPF) is a long-term savings scheme backed by the Ministry of Finance. It offers:
- Attractive interest rates (currently ~7.1% per annum*)
- Complete tax exemption (EEE)
- 15-year lock-in period
PPF Limit Per Year
Maximum Deposit
A person can invest a maximum of ₹1.5 lakh per financial year (April 1 to March 31). It applies to the total deposits, whether made in one go or spread across the year.
The limit resets every financial year.
Per Person or Per Account?
The limit is per individual, not per account.
Even if you hold multiple accounts (e.g., in your name and as guardian of a minor), the combined deposit should not exceed ₹1.5 lakh.
Read Also - How to Open a PPF Account Online: Step-by-Step Guide
PPF Monthly & Lump Sum Contributions Explained
Minimum Requirement -
At least ₹500 must be deposited yearly to keep the account active.
Monthly vs. Lump Sum -
A maximum of 12 contributions per year are allowed.
You can invest monthly or as a lump sum in April for maximum interest.
Best Time to Invest -
You should invest before the 5th of each month to earn interest for that month.
Also Read - Who Regulates the Public Provident Fund (PPF) in India?
Current PPF Interest Rate (April–June 2025)
As of the first quarter of the financial year 2025–26 (April 1 to June 30, 2025), the Public Provident Fund (PPF) interest rate remains unchanged at 7.1% per annum.
Interest is compounded annually, but calculated monthly on the lowest balance between the 5th and the last day of the month and credited to the account at the end of the financial year.
To maximize your returns, it's advisable to make deposits before the 5th of each month. This ensures that your contribution earns interest for the entire month.
Historical Overview of PPF Limit
| Financial Year | Annual Limit |
|---|---|
| 1968 - 1985 | ₹4,000 |
| 1986 - 1997 | ₹6,000 |
| 1998 - 2002 | ₹70,000 |
| 2003 - 2013 | ₹1,00,000 |
| 2014 - Present | ₹1,50,000 |
Can You Invest More Than ₹1.5 Lakh in a Year? If you do so, what happens?
No, you should not deposit more than the prescribed limit.
If you do so, the excess amount is refunded to your bank account or post office automatically by the concerned institution.
No interest is paid on the extra deposit. No tax benefit under Section 80C for the extra amount.
Joint and Multiple PPF Accounts: Does the Limit Change?
You can hold your own account and also be a guardian for a minor. But the total deposit across all accounts under your name must stay within the ₹1.5 lakh limit.
Tax Benefits Under Section 80C
Deposits under this scheme qualify for deduction under Section 80C up to ₹1.5 lakh. It has EEE Status -
1) E - Investment done by you under this scheme is exempted.
2) E - Interest earned on the deposited amount is exempted.
3) E - The Maturity amount you receive at the end is also exempted.
Read Also - PPF Withdrawal Rules: When & How to Access Your Savings Hassle-Free!
Should You Split PPF Investments with Family Members?
Minor Children
You can open a PPF for your minor child. But the total deposit (your account + child’s account) should be up to ₹1.5 lakh.
Spouse’s Account
You can invest in your spouse’s PPF, but you can claim 80C deduction only if the funds come from their income.
Common Mistakes & Misconceptions
- Thinking limit is per account (No, it’s per person)
- Believing HUFs can invest (Not allowed since 2005)
- Assuming the excess amount earns interest (It doesn't)
PPF vs Other Tax-Saving Options
| Scheme | Max Investment | Lock-in | Tax Benefit | Interest | Safety |
|---|---|---|---|---|---|
| PPF | ₹1.5 lakh | 15 yrs | 80C + EEE | ~7.1% | Very High (Govt.-backed) |
| ELSS | No Limit | 3 yrs | 80C | Market-linked | Medium |
| NPS | ₹2 lakh (incl. 80CCD(1B)) | Till 60 yrs | 80C + 80CCD(1B) | Market-linked | High |
| FD (5 yrs) | ₹1.5 lakh | 5 yrs | 80C | ~6-7% | High |
| SSY | ₹1.5 lakh | 21 yrs (girl child) | 80C + EEE | ~8.2% | Very High |
Smart Tips to Maximize Your PPF Returns
- Invest before the 5th of the month to earn interest
- Invest the full amount in April for full-year returns
- Stick to the ₹1.5 lakh limit to avoid loss of interest
The PPF limit per year is a key rule every investor must understand to fully enjoy the benefits of this excellent tax-saving and wealth-building instrument. Stick to the ₹1.5 lakh cap, invest smartly, and stay compliant to maximize your tax-free returns.
FAQs
Can I deposit ₹1.5 lakh in my child’s and my own PPF?
No. Combined deposit must not exceed ₹1.5 lakh per individual.
Will I get a tax benefit if I invest ₹2 lakh?
No. Only ₹1.5 lakh is eligible under Section 80C.
What if I miss a year’s deposit?
The account becomes inactive. You must pay a ₹50 penalty + a ₹500 minimum deposit for each missed year to reactivate.
Read Also - Can a PPF Account Be Transferred? Complete Guide for Banks, Branches & Post Offices
Read Also - Can an NRI Open PPF Account? Alternative Investment Options for NRIs in India
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