PPF Calculator India — Maturity Value & Tax Saving at 7.1% (2026)

How the PPF Calculator India Works

PPF maturity values at 7.1% for maximum annual investment of ₹1.5 lakh

How PPF Interest Is Actually Calculated — The April 5 Rule

PPF interest is not calculated on a simple annual basis. It is computed using a specific monthly formula: Interest for a month = Lowest balance between the 5th and the last day of that month × (annual rate ÷ 12). Interest is credited to your account annually on March 31.

This monthly-minimum rule has an important practical implication: if you deposit ₹1.5 lakh on April 6, you lose April's interest — the calculation takes the lowest balance between the 5th and the last day of April, which is ₹0 (since you deposited after the 5th). At 7.1%, one month of interest on ₹1.5 lakh is approximately ₹888. Over a 15-year PPF, consistently depositing after April 5 could cost you ₹12,000–₹15,000 in foregone interest.

At maximum ₹1.5 lakh per year for 15 years at 7.1%: total invested ₹22.5 lakhs, maturity value approximately ₹40.68 lakhs — interest earned is ₹18.18 lakhs, all tax-free.

The compounding in PPF is annual (credited on March 31) and operates on the entire accumulated balance including prior years' interest. This is why extending the PPF account pays off exponentially: the interest earned in year 20 is on a much larger base than the interest in year 5. As the table above shows, the corpus at 20 years (₹66.58L) is nearly double the corpus at 15 years (₹40.68L) — from just 5 more years of contributions plus compounding on the larger base.

PPF interest cannot be claimed as a deduction and is not reflected in Form 26AS — it simply does not appear on any tax form because it is entirely exempt under Section 10(11) of the Income Tax Act, 1961. You do not need to disclose PPF interest in your ITR.

Three PPF Decisions That Separate Optimal from Average Returns

Scenario 1: Sunita deposits on April 6 vs April 4 — the ₹13,000 difference

Sunita deposits ₹1.5 lakh on April 6 every year for 15 years. Her friend Priya deposits ₹1.5 lakh on April 4. Both invest the same total amount: ₹22.5 lakhs. Both earn the same 7.1% rate.

Priya earns interest on ₹1.5 lakh for all 12 months in each year. Sunita loses April's interest on each year's deposit. Over 15 years, Sunita foregoes approximately ₹13,320 in interest (₹888/year × 15 years) — not a dramatic sum, but entirely avoidable. The rule: set a bank standing instruction to transfer ₹1.5 lakh to PPF on April 1 each year.

Scenario 2: Extending for 5 years vs closing at maturity

Neha's PPF account matures with ₹40.68 lakhs after 15 years (₹1.5L/year at 7.1%). She considers two options: close the account and reinvest, or extend without contribution for 5 years.

• Close and put in FD at 7%: ₹40.68L at 7% for 5 years (quarterly compounding) = ₹57.6 lakhs. Tax paid on FD interest (30% bracket): approximately ₹5.1 lakhs. Net: ₹52.5 lakhs.
• Extend PPF without contribution: ₹40.68L at 7.1% for 5 more years = approximately ₹57.1 lakhs. Tax on interest: ₹0 (still PPF). Net: ₹57.1 lakhs.

Extending the PPF generates ₹4.6 lakhs more on the same base — purely from tax-free compounding versus taxable FD returns at the same rate.

Scenario 3: PPF + ELSS combination for full 80C utilisation

Vikram, 32, wants to maximise his ₹1.5 lakh Section 80C allocation. He is comparing: (A) ₹1.5 lakh all in PPF, (B) ₹50,000 PPF + ₹1 lakh ELSS, (C) ₹1 lakh PPF + ₹50,000 ELSS.

All three claim the same ₹1.5 lakh 80C deduction. The difference is return and risk: PPF earns 7.1% guaranteed and tax-free; ELSS earns market-linked returns (historically 11–14% over 10+ years) but with equity volatility and a 3-year lock-in per instalment. For a retirement horizon of 25+ years, most financial planners recommend splitting 80C: PPF for the debt-safe anchor (guaranteed, EEE) and ELSS for equity upside. A 50:50 split between PPF and ELSS is a common recommendation. Use the ELSS Calculator to compare expected outcomes.

PPF Rules, Limits & EEE Tax Framework — 2026

Governing law: PPF is governed by the Public Provident Fund Scheme, 2019, issued under the Government Savings Promotion Act, 1873. The scheme is administered through authorised bank branches (SBI, Bank of Baroda, Bank of India, and other nationalised banks) and all post offices.

Current interest rate: 7.1% per annum, compounded annually, credited on March 31 each year. The Ministry of Finance reviews the PPF rate quarterly (effective dates: April 1, July 1, October 1, January 1). The rate has been unchanged at 7.1% since the April–June 2020 quarter. Verify the current rate at the Ministry of Finance website or your bank before investment decisions.

Annual contribution limits: Minimum ₹500 and maximum ₹1,50,000 per financial year per individual. Contributions above ₹1.5 lakh do not earn interest on the excess and are refunded. You can make up to 12 contributions per year in any amount (subject to the annual ₹1.5L cap), or a single lump-sum. The maximum for a minor's PPF account (opened in parent's name) is shared from the adult's ₹1.5L limit.

EEE tax treatment: PPF is one of very few EEE instruments remaining after the government rationalised tax exemptions. (i) Investments qualify for Section 80C deduction up to ₹1.5L per year under the old tax regime. (ii) Interest earned is exempt under Section 10(11) — no TDS, no ITR disclosure required. (iii) Maturity amount is fully exempt from income tax. Note: Section 80C deduction is available only under the old tax regime; new-regime taxpayers cannot claim 80C but PPF interest and maturity remain tax-free regardless of chosen regime.

Lock-in and withdrawal rules: The PPF account has a 15-year mandatory maturity period (calculated from the year of account opening, not the date of first deposit). Partial withdrawals are allowed from the 7th year (after 6 complete years): up to 50% of the balance at the end of the 4th year or the preceding year, whichever is lower. Full premature closure is permitted after 5 complete financial years for specific reasons: treatment of a life-threatening disease for the account holder or dependent family, higher education of the account holder or minor, or change in residency status.

Loan against PPF: A loan against the PPF balance is available from the 3rd financial year to the end of the 6th year. The loan limit is 25% of the balance at the end of the 2nd year preceding the loan application. Interest on the loan is 1% above the prevailing PPF rate. The loan must be repaid within 36 months; otherwise, the interest charged rises to 6% above the PPF rate.

What Most PPF Investors Get Wrong

Depositing after April 5. Depositing on April 6 or later forfeits April's interest on that year's deposit. At ₹1.5 lakh and 7.1%, one month of interest = ₹888. Over 15 years, this is ₹13,320 in foregone returns — entirely avoidable with a standing instruction set for April 1.

Closing the account at the 15-year mark without comparing alternatives. Many investors treat the 15-year maturity as an automatic exit event. The extension-without-contribution option — where the full matured corpus continues to compound at 7.1% with zero additional investment — is often the most efficient capital allocation available, particularly when compared to taxable FD rates at the same headline rate.

Opening the account in January or February of a financial year. The 15-year lock-in is measured in financial years, not calendar years. An account opened in January 2026 matures at the end of FY 2040-41 (April 2041), not in January 2041. Opening the account before March 31 of a financial year means that year counts fully toward the 15-year term. Opening it on March 29 2026 is almost as good as opening it April 1, 2025 — both count FY 2025-26 as year 1.

Treating PPF and ELSS as competing rather than complementary 80C options. PPF provides guaranteed, risk-free, EEE returns — suitable for the debt anchor of a long-term portfolio. ELSS provides equity-linked returns with market risk, a 3-year lock-in, and the same 80C benefit. Most investors benefit from splitting the ₹1.5L 80C allocation between both rather than concentrating entirely in one. A 30% bracket taxpayer in the old regime should not choose between them — they should use both to the extent possible.

Not knowing you can open PPF at any authorised bank — not just SBI or post office. All public sector banks including Bank of Baroda, Bank of India, Punjab National Bank, and Canara Bank offer PPF accounts online through their net banking portals. Opening and managing online is standard. The interest rate is identical regardless of where the account is held.