Income tax is a tax that governments levy on the financial income generated by the different establishments in their jurisdiction. The funds thus obtained are used to finance its various functions. There are two types of taxes-Direct and Indirect. Income tax is a direct tax and other taxes like VAT, Service tax, Goods and Service tax are indirect taxes.

Taxes provide financial stability that is helpful in even distribution of wealth among the people of the country. Taxes play an important part in withstanding the upheavals of the economic cycles. The guidelines for the payment of income tax are based on the guidelines of the Income Tax Act.

As per this act, income from these sources can be taxed-

• Salaries
• Capital gains
• Income from house/property
• Profits from profession or business
• Income from other sources

Sum of income from all these sources is estimated as per the Income Tax Act. The tax rates are based on the earnings of a person and are termed as Income Tax Slabs. The Income Tax rates are revised every year during the budget.
Income tax is calculated yearly. Financial year begins on the 1st of April in a given year and ends on the 31st March the following year. Tax is imposed on the income earned in the previous year which is called as Assessment year.

The income tax deadlines for the financial years are-

• 31st July- The last date of filing returns for non-audit cases
• 30th September –The last date of filing returns for audit cases.

Filing of Income Tax for Salaried Persons

People earning income can file the income tax returns as per Form 16. The details of income are mentioned in Form 16 issued by their employers.

Income Tax Returns (ITR)

Tax Returns are a statement of earnings from different sources of income and these include tax liability, details of tax paid and other refunds that they should get from the government.

Late Filing of Income Tax Return

Income Tax Returns should be filed before the deadline to avoid the penalty for non-filing of tax returns.

The clause ‘losing relief in case return not filed within due date’, was apparently not completely and clearly understood by the people and they concluded that complete Chapter VI A deduction is covered. The general public seems to have understood that deduction u/s 80C (payment of School Fee/LIC/PPF), 80G (Donations), 80D Mediclaim, 80TTB & 80TTA (interest from the bank) will no longer be allowed if the filing of the Income Tax Return is done after the due date. This is not true as only Part C of Chapter VIA is included in the budget proposal.

There are chances of loss of relief in case of some incomes mentioned in Part C and this is when the ITR is filed after the due date. The relief permitted under the other four parts will remain undisturbed by the proposed amendment. The Chapter VIA of the Income Tax Act 1961 covers the “Deductions to be made in Computation of Total Income”.

There are five parts to this chapter.

• • Part A is General and covers Sections 80A, 80 AB, 80AC, and 80B.
  • Part B covers deductions in respect of some payments (containing Sections 80C to 80GGC)
  • Part C includes deductions in respect of some incomes (this includes Sections 80H to 80TT)
  • Part CA covers deductions with respect to other incomes (covering Sections 80TTA and projected 80TTB)
  • Part D includes other deductions (covering Sections 80U).

Payments of Life Insurance Premiums, investing in school fee, provident fund, health insurance, medical treatment, preventive health check-up, interest for loans taken for house property/education, charity given to some institutions, rent paid, and political parties etc. are included in Part B of Chapter VIA and will remain unaffected by the proposed amendment. This amendment will not affect the deductions of Bank interest u/s 80TTA and proposed 80TTB and person with disability u/s 80U will remain unaffected by this amendment.

As per this proposed amendment, the people who are eligible to claim deductions covered in these sections only will not get deductions under Part C of Chapter VIA if their IT return is filed after the due date. This includes Section -80-IAC, Section 80-IBA, Section -80JJA, Section 80LA, Section 80P, Section 80 QQB, Section 80 RRB.

The following sections under Part C of the chapter VIA have been in force under section 80A I case of filing IT Return after the due date. These are Section 80IA, Section -80-IAB, Section 80-IB, Section -80-IC, Section-80-ID, and Section-80-IE.

A study of Part C shows that even though this part had 41 sections only 14 are applicable in the present context. Thus the general public should not feel anxious about losing the deductions available to them under Part B, CA and D even if they file the Income Tax Returns after the due date but prior to the relevant Assessment year or before completion of the assessment whichever takes place earlier.

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If you have PPF account and due to some unforeseen circumstances, you need to withdraw money from PPF account then this may incur some or great losses to you. Withdrawing money from immature PPF account is not recommended yet people need the money in urgent situations then in this case let’s explore the consequences of this and clarify the apprehension you have for the premature PPF money withdrawal. Public Provident Fund (PPF Account) come to appear like a great tool to channelize little savings and keep them for retirement. What a lot of people are unaware of is that it makes a great investment tool as well.

But before we invest in PPF we need to have a basic idea of what exactly PPF is and all the knowledge about deposit, withdrawals, and returns. PPF comes across as one of the safest ways to make an investment as it is government regulated and therefore provides security of your investments and with the return of 7.8% on an average in the recent years PPF beats any other form of investment and is therefore considered as the best long-term investment too.

Although the fact remains that the rate of return varies from year to year according to the market, but is anyway good for cautious investors who do not want to invest in the equity market and wishes to go for an investment which provides both safety and good returns.

But PPF scheme lays down certain strict and specific rules when it comes to withdrawal from the PPF account. What you read ahead will guide you through all the withdrawals from your PPF account along with providing an all-round idea on the PPF scheme.

What Is PPF (Public Provident Fund)?

Public Provident Fund is a very widespread long-term investment option which is initiated by the government which comes with a lock-in period of 15 years. It accumulates regular returns on investments and sums up the entire amount, the interest along with the principal investment on maturity. The minimum one may invest in PPF stands to be Rs. 500 whereas the maximum investment in a year is fixed at Rs. 1,50,000. PPF comes with tax savings benefits. The invested amount in PPF is eligible for an income tax deduction, provided you file a claim producing your investment proofs at the time of filing income tax returns.

The complete withdrawal of the invested amount in a PPF scheme is only possible after maturity, that is, only after the 15^th year from the date of creation. However, partial withdrawal is possible which are again subjected to certain rules.

How To Check PPF Account Balances?

Checking your PPF account balance is quite easy if you have net banking enabled. All you have to do is to log in with your User ID and password under PPF section and click on information balance and you will find all the particulars regarding balance in the account, interest accumulated, deposits made and more such.

However, in case you have a PPF account with a Post Office, you may not be able to check your PPF account balance for all the branches. You have to visit the respective post office wherein you have an account with your passbook and get your passbook updated in order to know the current balance.

Withdraw Money from PPF Account Prematurely

PPF is a scheme for the long term. However, that doesn’t mean that you are not eligible to withdraw any amount before the maturity period of 15 years. One is allowed to withdraw from the PPF account right after the completion of the 5^th year since the account was opened. This definitely makes PPF a multipurpose tool that helps you withdraw in times of financial emergencies even if that is before the date of maturity. Also, PPF provides loans for a short term in order to meet your financial requirements which comes at the cheaper rate of interest as compared to any commercial bank or financial institution.

The rules for withdrawals state that 50% of the accumulated amount can be withdrawn after the 5^th year since the date of creation of the account. But it is here where the PPF account holder has invested between 7 years and 12 years, the limit of withdrawal becomes higher.

It is important that the account holder follows the financial year, that is from 1^st April to 31^st March in order to get an estimate of the withdrawal period. The time-frame is necessarily the financial year for the withdrawal. Also, it is to be let in mind that only one partial withdrawal is permitted in one financial year.

The account holder has to go through an application process for withdrawal which includes submission of Form C through the bank they maintain their account in. The applicant needs to mention the account number and the amount to be withdrawn in the Declaration section of the form. The number of years completed from the date of initial subscriptions also needs to be specified.

The account holder has an eligibility to withdraw the full accumulated amount after completion of 15 years from the date of creation. The account holder also has the option of leaving the amount un-withdrawn but then he has to apply for a term extension of 5 years. Premature closure of PPF account, however, is possible only in the event of the death of the account holder. You can calculate the PPF withdrawal amount using PPF calculators.

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If you have PPF account and want to check the PPF balance or calculate the interest on the PPF then you need PPF calculator or Public provident fund calculator. I this article we’ve covered different type of PPF calculator which you can use to calculate PPF maturity amount, PPF withdrawal amount, PPF interest rate etc. Introduced in the year 1968, Public Provident Fund works with an objective to organize small savings in the form of investment combined with returns. PPF is popularly known as a tax saving investment instrument which helps an individual to create a financial cushion for retirement.

However, while many individuals find PPF to be a complicated investment instrument, it’s rather simple. For the many investors who find it confusing how the interest on PPF is calculated, the PPF calculator is one stop solution. It calculates the interest earned over a time period, the final maturity amount, or the investment growth over the years.

The PPF interest can be calculated every month, based on the minimum balance between the 5th day of the month till the end of the month. However, the total interest per annum is added back to PPF at the year-end. The PPF interest rate changes on a quarterly basis. The current PPF interest rate effective from 1st January 2018 is 7.6% per annum (Compounded annually).

An individual can make a minimum, annual deposit of Rs 500, whereas a maximum amount of Rs 1.5 lakh can be deposited in a PPF account. Any amount exceeding the limit of Rs. 1.5 lakh in a financial year will not earn any interest. The amount can be deposited either in lump sum or in maximum of 12 monthly installments yearly. The maximum tenure of a PPF account is 15 years, which can be further extended to 5 years and the complete amount can be withdrawn after the completion of the maturity period.

It analyses the changes in interest rate and also the month in which the interest rate changes during a financial year. As a PPF account includes both tax benefit and loan facility so it is important to calculate the tax exemptions and permissible loan amount also.

Types of Public Provident Fund Calculators

There are 7 major types of PPF calculator which help investors with the 6 different types of calculations pertaining to PPF.

1. PPF Fixed Monthly Investment Calculator

PPF fixed monthly investment calculator helps investors to estimate their payable amount when investing in PPF on a monthly basis. To calculate the monthly interest amount, an individual is required to provide the month and financial year of opening the PPF account and the fixed monthly deposit. Just submit these details and the result will show the payable amount.

2. PPF Fixed Yearly Investment Calculator

PPF fixed yearly investment calculator helps the investors to compute their payable amount when investing in PPF on yearly basis. However, the PPF interest rate keeps changing on a quarterly basis, the major detail that needs to be filled is the financial year when PPF account was opened and the fixed annual investment/deposit.

3. PPF Variable Yearly Investment Calculator

PPF variable yearly investment calculator requires investors to enter some basic information which includes the financial year of opening the PPF account and the amount deposited per annum.

4. PPF Benefit Calculator

PPF benefit calculator includes various elements like fixed yearly contribution, the age of the investor, and the prevailing rate of interest of that year. Once an individual provides all the details, the PPF benefit calculator calculates the tax-free income, income tax liability before and after investment, yearly tax saving and overall tax saving in 15 years.

5. PPF Loan Calculator

The PPF loan calculator computes the approved loan amount. To calculate the loan amount, one just needs to enter the balance in the account.

6. PPF Withdrawal Calculator

Pre-mature PPF withdrawals are allowed after the completion of seven financial years from the year of opening the account. One can calculate both the amount of withdrawals, before and after extension with the help of PPF withdrawal calculator.

7. PPF Maturity Calculator

PPF maturity calculator simply helps the investors to calculate the time of maturity of the PPF account.

While it’s great to have access to these calculators, it’s always good to have a working knowledge of how the total PPF balance is calculated at the end of a financial year. So, let’s take a look at two different cases to determine the difference your method of investing makes to your PPF returns.

Case 1: Mr. Bose invests Rs 90,000 as a lump sum on 1st April in PPF.

Interest calculation – Rs. 90,000/12 = 7,500 * 7.6% = Rs. 570

Total Interest accrued at the end of the year in Mr. Bose’s PPF account will be Rs. 6840

Total PPF balance at the end of the financial year in Mr. Bose PPF account will be Rs. 96, 840 (Rs. 90,000 + Rs. 6,840)

Case 2: Mr. Sarkar invests Rs 7,500 (Rs 7,500*12= Rs 90,000) under PPF before the 5th of each month.

Interest Calculation- Rs. 7,500*7.6% = Rs. 570

Total Interest accrued at the end of the year in Mr. Sarkar PPF account will be Rs. 6840 (Rs. 570*12)

Total PPF balance at the end of the financial year in Mr. Sarkar PPF account will be Rs. 96, 840 (Rs. 90,000+ Rs. 6,840)

Case 2: Mr. Sarkar invests Rs 7,500 (Rs 7,500*12= Rs 90,000) under PPF after the 5th of each month.

Interest Calculation- Rs. 7,500*7.6% = Rs. 570

Total Interest accrued at the end of the year in Mr. Sarkar PPF account will be Rs. 6270 (Rs. 570*11)

Total PPF balance at the end of the financial year in Mr. Sarkar PPF account will be Rs. 96, 270 (Rs. 90,000+ Rs. 6,270)

Conclusion

So, with the help of these examples, one can conclude whether he/she should invest annually or monthly under the PPF account. The interest calculation in PPF account is very simple. Moreover, with the help of PPF calculator, one can also know the right time to invest in PPF in order to avail maximum return.

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