PPF Calculator India FY 2025-26 — How Public Provident Fund Returns Work
The Public Provident Fund (PPF) is one of India's most popular long-term savings instruments, backed by a government guarantee and offering the coveted EEE (Exempt-Exempt-Exempt) tax status. For FY 2025-26, the PPF interest rate stands at 7.1% per annum, compounded annually and credited to your account on 31st March each year. The minimum investment is ₹500 per year and the maximum is ₹1.5 Lakh per year — exactly the Section 80C deduction limit.
The PPF maturity formula is: F = P × [({(1+i)^n} – 1) / i], where P is the annual investment, i is the rate of interest, and n is the number of years. Our calculator applies this compound growth year-by-year to give you an exact projection.
PPF Interest Rate FY 2025-26 — A Decade in Context
The PPF interest rate is reviewed by the Ministry of Finance every quarter. It was last revised from 7.9% to 7.1% in April 2020 and has remained stable since. While this may seem low compared to equity returns, the risk-free, guaranteed nature of PPF — combined with its EEE tax status — makes the effective post-tax yield significantly higher than a 7.5% Fixed Deposit, where interest is taxable at your slab rate.
For a taxpayer in the 30% slab, a 7.5% FD earns an effective post-tax return of just ~5.25%. PPF's 7.1% is entirely tax-free — making it the equivalent of a ~10.1% pre-tax return for someone in the 30% bracket.
EEE Tax Status — Why PPF Is Uniquely Powerful
PPF is one of the very few instruments in India that qualifies for triple tax exemption under the Income Tax Act:
1. Exempt on Investment: Annual contribution up to ₹1.5L qualifies for Section 80C
deduction under the Old Tax Regime — saving up to ₹46,800 in tax for a 30% slab taxpayer.
2. Exempt on Interest: PPF interest earned each year is completely tax-free under Section 10(11).
3. Exempt on Maturity: The entire maturity corpus is fully exempt from income tax.
Note: Under the New Tax Regime (FY 2025-26), Section 80C deductions are not available. However, PPF interest and maturity remain tax-free under both regimes — only the initial deduction benefit is lost. Compare Old vs New Regime using our Income Tax Calculator.
PPF vs ELSS vs FD — Which Wins for Tax Saving in FY 2025-26?
| Parameter | PPF | ELSS | Fixed Deposit (80C) |
|---|---|---|---|
| Returns | 7.1% (guaranteed) | 12–15% (market-linked) | 6.5–7.5% |
| Lock-in Period | 15 years | 3 years | 5 years |
| Tax on Returns | Fully exempt (EEE) | LTCG above ₹1.25L @ 12.5% | Taxed at slab rate |
| 80C Deduction | Yes (Old Regime) | Yes (Old Regime) | Yes (Old Regime) |
| Best For | Safe, tax-free corpus | Higher returns, 3-yr lock-in | Simplicity, bank safety |
For most salaried employees, the ideal approach is to use PPF as the stable, risk-free debt component of their portfolio and complement it with SIP investments in equity mutual funds. See how SIP compounding compares with our SIP Returns Calculator.
Frequently Asked Questions
Common questions about PPF interest rates, tax benefits, and withdrawal rules.
PPF (Public Provident Fund) is a government-backed, long-term savings scheme with guaranteed returns and full tax exemption (EEE status). Any Indian resident individual can open a PPF account at a post office or authorised bank branch. You can also open one for a minor child. NRIs cannot open new PPF accounts but may continue existing ones till maturity at prevailing interest rates.
The PPF interest rate for FY 2025-26 is 7.1% per annum, compounded annually. This rate is declared by the Ministry of Finance quarterly. Interest is calculated on the minimum balance between the 5th and last day of each month, and is credited to your account on 31st March. The rate has been stable at 7.1% since April 2020. It is subject to change each quarter.
PPF has EEE (Exempt-Exempt-Exempt) tax status. Under the Old Regime, annual contributions up to ₹1.5L qualify for Section 80C deduction, interest is tax-free under Section 10(11), and maturity is fully exempt. Under the New Regime (FY 2025-26), Section 80C deductions are not available — so you lose the initial investment deduction — but PPF interest and maturity remain tax-free. The EEE status on growth is preserved regardless of regime.
Partial withdrawal is allowed from the 7th year onwards. You can withdraw up to 50% of the balance at the end of the 4th year or the balance at the end of the year preceding the withdrawal, whichever is lower. Premature closure is allowed only after 5 years for specific reasons: life-threatening medical conditions, higher education of the account holder or their children, or change of residency to NRI status. Premature closure attracts a 1% interest penalty.
PPF: Guaranteed 7.1% p.a., 15-year lock-in, EEE tax status — zero tax on interest or maturity. Best for conservative investors who want safe, long-term wealth accumulation.
ELSS: Shortest 3-year lock-in, market-linked returns of 12–15% historically, but LTCG above ₹1.25L is taxed at 12.5% for FY 2025-26. Best for equity risk-tolerant investors.
Tax-saver FD: 5-year lock-in, 6.5–7.5% returns, but interest is fully taxable at your slab rate. Simplest option but worst post-tax returns.