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.
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1. BNP Paribas Long Term Equity Fund
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5. IDFC Tax Advantage (ELSS) Fund
6. Birla Sun Life Tax Relief 96
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8. Reliance Tax Saver (ELSS) Fund
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