PPF is the Public Provident Fund, a small-savings account under the Public Provident Fund Scheme, 2019. A resident can open it at a post office or an authorised bank. You may deposit from ₹500 to ₹1,50,000 in a year, in multiples of ₹50. The yearly cap is also the section 123 ceiling, so a full PPF deposit uses the whole old-regime basket by itself.
The interest rate is notified each quarter. For 1 October 2026 to 31 December 2026 it is 7.1%. The 2019 scheme text still prints an older rate. The quarterly notification is the rate that is paid. Interest is worked out on the lowest balance between the close of the 5th and the end of the month. It is credited on 31 March. A deposit after the 5th does not earn interest for that month. That one rule is why people try to put the year’s money in by 5 April.
The account matures 15 years after the end of the year in which you opened it. You can extend it in blocks of 5 years. The opening year counts, so a 15-year term has 16 contributions if you deposit every year including the first.
In the old regime a PPF deposit qualifies under section 123, read with Schedule XV, inside ₹1,50,000. That was section 80C. The new regime under section 202 does not allow section 123. The maturity is dealt with under Schedule II, which was section 10(11). The interest is not taxed year by year in your hands. That is the EEE shape, with the first E missing in the new regime.
A worked example
Deposit ₹1,50,000 a year, by the 5th of April, at 7.1%, with no extension. The PPF engine’s contributions are ₹24,00,000 over 16 years. Interest credited is ₹21,17,701. The maturity value is ₹45,17,701. The rate can change every quarter, so this maturity is what today’s notified rate produces if it never moves. The PPF calculator lets you type a different rate. It does not pretend the ministry has promised 7.1% for 15 years.
On salary of ₹15,00,000, claiming ₹1,50,000 in the old regime cuts taxable income to ₹13,00,000. The new regime ignores the deposit and the bill on that salary is ₹97,500. The FD, RD and PPF guide sets this next to a bank deposit. The PPF, ELSS and NPS guide sets it next to a market product.
Mistakes people make
- Using the 7.9% printed in an old scheme booklet. The quarter’s notification is 7.1%.
- Depositing after the 5th and expecting that month’s interest.
- Claiming the deposit in the new regime.
- Counting 15 deposits. The opening year makes it 16.
- Treating PPF as a bank FD that you can break next year. The term is the point.
The section
The scheme is the PPF Scheme, 2019. The deduction is section 123, Schedule XV, paragraph 1(e) (this was section 80C). The maturity exclusion is Schedule II (this was section 10(11)). The rate is the ministry’s quarterly memorandum.
Questions
Is the PPF rate locked on the day I open the account?
No. The Finance Ministry notifies it every quarter. For 1 October 2026 to 31 December 2026 it is 7.1%. Money already in the account earns the rate of each quarter. A bank FD locks the rate on the receipt. PPF does not.
Can I claim the deposit in the new regime?
The maturity stays tax-free under Schedule II. The deposit reduces taxable income only in the old regime, inside the ₹1,50,000 cap of section 123. Section 202 does not allow that claim.
How many deposits are there before maturity?
The account matures 15 years after the end of the year you open it. The opening year counts, so a regular account has 16 deposits. At ₹1,50,000 a year that is ₹24,00,000 paid in.
Sources
Figures checked 28 Oct 2026.