PPF interest rate has been cut from 8.7% to 8.1%

In a move that firms the view that the government wants to curtail its expenses,

  • Interest rate on PPF has been cut from 8.7% to 8.1%. 
  • Interest from Kisan Vikas Patra has also been cut, from 8.7% to 7.8%.

Here are some important facts about PPF and KVP –

  • PPF is eligible for deduction under section 80C
  • Kisan Vikas Patra is not eligible for deduction under section 80C
  • Interest income from PPF is exempt from tax
  • Interest income from KVP is taxable
  • Interest on PPF as well as KVP is compounded annually.

 

Here are some other revisions announced –

The government also done a rate cut on other small saving schemes such as

On 1-year time deposit to 7.1% from 8.4%

On 2-year time deposit to 7.2% from 8.4%

On 3-year time deposit to 7.4% from 8.4%

On 5-year time deposit to 7.9% from 8.5%

On 5-year National Saving Certificates to 8.1%

On 5-year Senior Citizen Scheme to 8.6% from 9.3%

On Girl Child Scheme to 8.6% from 9.2%

On 5-year recurring deposit to 7.4% from 8.4%

 

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