Individuals can take a loan against the balance in their Public Provident Fund, or PPF, account. However, this facility is only permitted between the third and sixth year.
The amount is restricted to 25% of the balance at the end of the second year preceding the year in which the loan is applied for. For example, if the loan was applied in 2015-16, the amount permitted as a loan would be 25% of the account balance at the end of 2013-14.
The rate of interest is 2% over and above the rate being earned on the PPF account. So if the rate of interest is 8.8%, then the interest on the loan amount is 10.8%.
The loan has to be paid back in 36 months. If the account holder fails to do so, the interest shoots up from 2% to 6%, over and above the rate being earned.
Top 10 Tax Saving Mutual Funds to invest in India for 2016
Best 10 ELSS Mutual Funds in india for 2016
1. BNP Paribas Long Term Equity Fund
2. Axis Tax Saver Fund
3. Franklin India TaxShield
4. ICICI Prudential Long Term Equity Fund
5. IDFC Tax Advantage (ELSS) Fund
6. Birla Sun Life Tax Relief 96
7. DSP BlackRock Tax Saver Fund
8. Reliance Tax Saver (ELSS) Fund
9. Religare Tax Plan
10. Birla Sun Life Tax Plan
Invest in Best Performing 2016 Tax Saver Mutual Funds Online
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