Personal Finance

Sunday, 28 February 2016

Bank Deposit: A Loss Making Investment

Yield or return on investment is measured in two ways:

Inflation adjusted rate of return
Inflation unadjusted rate of return.

Real rate of return for an individual is inflation adjusted rate of return because of the fact that an individual investor saves and invests to meet his future needs, e.g., purchase or construct a house of his own, child education, retirement planning, or to meet unforeseeable exigencies.

All the future goals are met at then prevailing prices which are largely influenced by the rate of inflation over the period. Inflation in monetary prices erode purchasing power of money. Due to inflation prices of commodities and services tend to rise over the period.

If the rate offered on investment is lesser than rate of inflation the compounded value of investment fall short of requirements. One more point here needs investors attention and the point is applicable rate of income tax. Tax takes away a substantial portion of earning of the individual falling within tax bracket. As rate of income tax increases in slabs, the investor must work out his post tax rate of return first and then he should compare it with average rate of inflation.

Let us illustrate it.

Suppose you put INR 10000 in a bank fixed deposit for five years @ 7.5% (since rates are falling so rate of interest Indian commercial banks are offering on FD are hovering around 7-8% at present) and you fall in 30% tax bracket.

Since interest earned on bank FD is taxable, tax payable on annual tax earning is

 10000 × 7.5% × 30% = 225 + 3% Edu. Cess = 231.75

This will leave INR 750-231.75=518.25 (5.1825%) as post tax return from the FD for you.

Compounded sum at this post tax rate for 5 years will become INR 12876. Now discount this money with the average rate of inflation estimated for the same period. It is estimated that the same will be in between 5.5% and 6% if the current trend continues in the near future. Optimistically if taken 5.5% discounted value of Compounded sum comes INR 9704.

It means at the time you book a bank FD at the given rate you book a loss of INR 296 for 5 years instead of an income, provided you are in 30% tax bracket. Those who fall in a lower tax bracket may expect a nominal gain at the given rate of inflation (5.5%). If the rate of inflation stay at a higher order this will upset the calculations.

Note that investment in 5 year FD can be shown in 80C for exemption, so that factor is also there. But the above calculation just gives the general idea how you loose money in bank deposits after adjusting it for inflation.

Apart from the risk of upward movement of the rate of inflation there is yet another reason as to why a higher rate of return is required. The reason lies in the method of estimating rate of inflation.

In India inflation data are calculated on two different basis:

On the basis of wholesale commodity price
On the basis of consumer prices

The second is valid for household individuals. But the problem is that the Consumer Price Index (CPI) are computed taking the prices of daily consumption items in a given proportion. Thus the CPI reflects inflation (price rise in daily consumption items), not in the items average individual save for.

Normally we save to buy house, to pay for children education expenses, to meet children expenses and to meet medical expenses in case of ill health. The past experience show the rate of rise in these items cost have been much higher, about 10% to 12% per annum. When pre tax rate of return is barely 7.5% how can it help you meet your target?

Then, what should be right strategy? Answer is- put a small proportion of your savings in bank just enough to provide handy cash to meet emergency cash needs. To meet long term goals go for PPF (EEE deposit scheme) and National Pension System(NPS) (EET deposit scheme) for higher yield investments.

If you can invest more money look at proven mutual fund plans, preferably multicap funds and balanced (hybrid) funds in order to keep level of risk at lower side.

That's all for this topic Bank FDs - A Loss Making Investment. If you have any doubt or any suggestions to make please drop a comment. Thanks!

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Monday, 13 April 2015

EEE EET ETE explained

There are 3 ways Govt. taxes the monies invested by public at various stages of investment.
When the money is invested it goes through three stages, which are -

Contribution to an investment scheme.
Accumulation of interest.
Withdrawal stage, when the lump sum amount (sum of money invested and accrued interest) is withdrawn.

How does EEE relate to these stages?

EEE stands for Exempt, Exempt, Exempt which means -

First exempt means that the amount invested will be eligible for deduction under some section (As exp 80C) subject to the total exemption limit. The invested amount will be deducted from the total taxable income of the individual.
Second Exempt means the accrued interest will not be added to the total income and will not be taxed. Thus in case of second exempt interest earned is not taxed.
Third exempt means the income from the investment, at the time it is withdrawn, would be tax free.

As of now EPF, PPF, SSY, Life Insurance Policies, ELSS comes under EEE.

How does ETE relate to these stages?

ETE stands for Exempt, Taxed, Exempt which means -

First exempt means that the amount invested will be eligible for deduction under some section (As exp 80C) subject to the total exemption limit. The invested amount will be deducted from the total taxable income of the individual.
Taxed means the accrued interest will be taxed.
Third exempt means the income from the investment, at the time it is withdrawn, would be tax free.

Some of the investments which can be categorized under ETE would be Tax Saver FDs, NSC.

How does EET relate to these stages?

EET stands for Exempt, Exempt, Taxed which means -

First exempt means that the amount invested will be eligible for deduction under some section (As exp 80C) subject to the total exemption limit. The invested amount will be deducted from the total taxable income of the individual.
Second Exempt means the accrued interest will not be added to the total income and will not be taxed. Thus in case of second exempt interest earned is not taxed.
Taxed means the income from the investment (Principal + Accrued Interest), at the time it is withdrawn, would be taxed.

Some of the investments which can be categorized under EET would be National Pension Scheme(NPS), Pension Plans.

There are other similar terms too like TTE (Fixed deposits), TEE (Stocks and Equity Funds if kept for more than 3 years).

That's all for this topic EEE EET ETE explained. If you have any doubt or any suggestions to make please drop a comment. Thanks!

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Thursday, 9 April 2015

Shah Rukh Khan's net worth

According to a report in Wealth-X Shahrukh's estimated net worth is $600 million (More than 3600 Crore). He is named as the second richest Actor in the world beaten only by Jerry Seinfeld with the estimated net worth of $820 million.

Shahrukh Khan was the only Bollywood star to feature in the top ten of the international celebrity rich list for 2013 - compiled by Wealth-X.

Some of the ways Sharukh khan makes money -

There are movies of course and his own production house but there are many other ways by which SRK makes money.

Endorsements - SRK can be seen endorsing a whole gamut of products cold drinks, cars, pan masala, paint to fairness creams. According to a study Shahrukh's brand value is Rs. 1011 Crore which is the highest among the celebrities.

Performing in weddings - According to a report in TOI (http://timesofindia.indiatimes.com/entertainment/hindi/bollywood/news/Shah-Rukh-Khan-charges-a-hefty-amount-for-weddings/articleshow/19999554.cms) SRK charges around Rs. 8 crore for wedding performance. So, just by shaking a leg in 10-15 odd weedings he can make close to 100 Crores in a year. Just as FYI Shah Rukh received around 250 invites for wedding appearances/performances in 2012 but took up only 10 of them.
Investments - Apart from owning a very famous address in Mumbai by the name "Mannat", SRK also owns several other properties (including houses) in several cities and countries across the globe, like London and Dubai to name a few. He also heads a production house 'Red Chillies Entertainment' - Film production and VFX being the two most important businesses of this house, which together constitute almost 70% of it's revenues.
IPL team Kolkata Knight Riders (KKR) one of the profit making IPL franchise is also owned by SRK.
TV Show hosting - SRK after starting his career in TV once again made his presence felt in the television world as the host of reality shows. He has hosted reality shows like; Kaun Banega Crorepati Season 3, Kya Aap Paanchvi Pass Se Tez Hain? and Zor Ka Jhatka: Total Wipeout. A TOI report says that in 2011, he charged Rs 2.5 crores for Zor Ka Jhatka..., an Indian adaptation of the American reality show Wipeout.

Performance at Award Shows - Shah Rukh Khan who is one of the most active participants in almost all award ceremonies, makes a lot of money through performance in such shows. And the number of awards (shows) that we have these days (which is really MANY!) is certainly helping him!
According to reports SRK charges around Rs 2-3 crore for over an hour's performance, which may also include hosting.

Monday, 6 April 2015

How Many Indians Pay Income Tax

India being a developing country is supposed to have a low Income Tax paying population but it would still be surprising to read that only about 3% of Indian population pay Income tax, which comes to 35 million tax payers (3.5 crore). In that too majority of the tax payers fall under 2.5 - 5 Lakhs slab. Just as comparison in USA around 45 percent of the population pays taxes.

Update : Income tax department has released the data for AY 2015-2016. As per the data there were 4.07 crore returns filed by individuals in AY 2015-2016 (FY 2014-2015). Number of returns filed in AY 2014-2015 was 3.65 crore.

But the disappointing fact is that out of 4.07 crore tax returns filed about 2.06 crore people actually paid any tax. Rest of the 2.01 crore filed the return but paid zero tax.

Of that 2.06 crore who did pay tax, around 1.85 crore were in the lowest tax slab and paid an average Rs. 24,000 as income tax in AY 2015-2016 meaning a collection of Rs. 44615 crore from these 1.85 crore people.

Out of the total returns filed, only 9690 paid income tax of more than INR 1 crore. Total income tax collection from these 9690 tax payers was 22,984 crore.

There was only one individual who paid more than 100 crore in taxes, tax collection from that individual was 238 Crore.

Reference : https://www.incometaxindia.gov.in/Documents/Direct%20Tax%20Data/Income-Tax-Statistics-IT-Return-AY-2015-16.pdf

As per the last census average household size in India is 4.8 person per house hold. If we take it as 5 and assume there is only one earning member per household then these 3.5 crore tax payer people take care of 17.5 crore population. Moreover according to Rangarajan committe below poverty line population in India is estimated at 363 million (36.3 crore) in 2011-12 This means 29.5% of the India population lives below the poverty line.
If we add these numbers (Population which is coming from the household where one of the member is paying taxes and the population which is below poverty line thus unable to even take care of their daily bread forget taxes)

17,50,00,000 + 36,30,00,000 = 53,80,00,000 (53.8 crore)

Now if we take the population of India as 125 crore (1,25,00,00,000 or 1.25 billion), number of people left -

1,25,00,00,000 - 53,80,00,000 = 71,20,00,000 (71.2 crore)

If we go by 5 people per houshold that will mean 14.24 crore households which are not paying any income tax.

If we take another 30% population whose income is less than the taxable income that will leave out another 21.36 crore people. Still there are 49.84 crore people left coming to around 10 crore household. Which means roughly there are around 10 crore households who should pay taxes but not doing so.

It's anybody's guess that most of these people who are not paying any taxes are -

Rich farmers - Agriculture income is exempted from tax in India. Though many of the small farmers may be having a hand to mouth existence but there are rich farmers too who should be taxed.

Crorepati farmers: tax them please!

Business owners - According to RBI data, cash still accounts for 90 per cent of all monetary transactions in India. So it is easy for the business owners to manipulate their taxable income by dealing in cash and under invoicing or not giving invoice at all.

Self Employed Professionals - This can be explained through an example -
Let's take an example of two chartered accountants A & B residing in the same apartment. A works in a financial institution and B has his own practice in the same commercial complex. Both of them drive to office. They both spend around Rs 12,000 on petrol bills. While A gets tax benefit of only Rs 1600 (Conveyance limit has been increased from Rs. 800 to Rs. 1600) B can claim the entire amount as a deduction from his income. Same for food bills self employed can claim the whole amount as business expenses. So self employed person can claim a lot of expenses as business expenses and pay almost nil tax.

Deviation in the number of Income Tax payers

Data about the number of income tax payers also show the inequality in the earnings and how the wealth is concentrated among very few, it also shows how people are not disclosing their true income. We have to go through some data to see that -

Details of number of income tax payers in the tax slabs

Details of number of income tax payers in the tax slabs of Rs. 0-5 lakh, Rs. 5-10 lakh, Rs. 10-20 lakh and beyond Rs. 20 lakh, as furnished by the Ministry in their written submission are given as under :

Slab	Number (in lakhs)	Percentage of taxpayers
0-5 lakhs	288.44	89.0%
5-10 lakhs	17.88	5.5%
10-20 lakh	13.78	4.3%
>20 lakh	4.06	1.3%

This data shows how much inequality there is among the tax payers. Only 1.3 percent of the tax payers have taxable income above Rs. 20 Lakhs, whereas, 89 percent of the tax payers have taxable income not more than Rs. 5 Lakhs.

Amount of tax collected as per tax slabs

Details regarding amount of tax collected under the existing rates and percentage of tax collected in each of the said slabs as furnished by the Ministry are given as under :

Slab	Tax Collected (Rs. in crores)	Percentage of tax collected
0-5 lakhs	15,010	10.1%
5-10 lakhs	21,976	14.8%
10-20 lakh	17,858	12.1%
>20 lakh	93,229	63.0%

Again notice the deviation 89 percent of tax payers are paying 10.1 percent of the taxes where as 1.3 percent of tax payers pay 63 percent of the taxes.

Going by the data it can be seen that GOI need to increase the tax base rather than increasing the income tax or service tax (Which is increased to 14% in this year's budget (2015)). Any increase in service tax hits the salaried class more as they end up paying more in double taxation.

Readers are welcome to present their thoughts

** Source for this post is Standing commitee on finance(2011-12) report (49).

That's all for this topic How Many Indians Pay Income Tax. If you have any doubt or any suggestions to make please drop a comment. Thanks!

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Thursday, 2 April 2015

Public Provident Fund (PPF) Account Opening Eligibility

A Public Provident Fund (PPF) Account can be opened by any resident Indian Individuals (Salaried, Business men, Self employed professional or any other category).

If a salaried class person has a General provident Fund account, or an Employees Provident Fund account, he can still have a PPF account there is no restriction.

PPF account by Grand Father/Mother

The grand father/mother cannot open a PPF account on behalf of their minor grand son/daughter except in the case grand father/mother are acting as the guardian of the minor.

NRIs opening PPF account

Non-resident Indians (NRIs) are not eligible to open a new PPF account.

Earlier you could keep an existing PPF account even if you become an NRI but that rule has also been changed. As per the new rule issued in 2017 as soon as your residential status changes your PPF account will be deemed closed.

From the day your residential status changes till the day you withdraw money from your closed PPF account, your closed PPF account will earn the interest rate payable on a post office savings account (Current rate is 4%), which is almost half of the interest rate you get on a PPF account.

HUF opening PPF account

Opening of PPF accounts in the name of Hindu Undivided Family is also not permitted. Since May 13, 2005, HUF also can not open a account under the PPF scheme. If the PPF accounts was opened, in the name of HUF, prior to May 13, 2005 subscription may continue to that account till maturity. That account can not be extended any further i.e. it has to be closed after 15 years.

Number of PPF accounts

A person can have only one PPF account in his name, if a person opens 2 PPF accounts anyhow and at some point it is detected that a person has 2 accounts (can easily be done by PAN) one of them would be closed and only the principal amount would be returned not the interest. Thus it would serve no purpose to have 2 PPF accounts.

PPF account for a minor

One exception to the stated one account per person rule is having an account for the minor where a person who is already having a PPF account can open another account on behalf of a minor but in that case combined limit for both the account would be 1.5 lakhs (Current limit for the PPF) anything deposited over and above that amount won't get any interest.

In case of family of four - couple and their 2 kids, Kid-1 and Kid-2 there are following scenarios for the number of PPF accounts an individual can have.

Father can open PPF account for self, kid-1 and kid-2.
Mother can open PPF account for self, kid-1 and kid-2.
Father can open PPF account for self and one kid (kid-1 or kid-2).
Mother can open PPF account for self and one kid (kid-1 or kid-2).

Please note that the combined investment in any of the above scenarios should not exceed Rs. 1,50,000.

Points to note -

Joint PPF accounts are not permitted.
An individual can't have more than one account on his/her name.
No age is prescribed for opening a PPF account.
Parents and Guardians can open PPF account for minors.
Opening of PPF accounts in the name of Hindu Undivided Family is not permitted.
NRIs are not eligible to open a PPF account. Any existing account will be deemed closed on the date of residential status change.

That's all for this topic Public Provident Fund (PPF) Account Opening Eligibility. If you have any doubt or any suggestions to make please drop a comment. Thanks!

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Public Provident Fund (PPF) Tax Exemption Benefits

What makes PPF the choice of investment for everybody is that -

The amount invested in PPF, with in the financial year, can be claimed as deduction under 80C.
The interest earned is tax free.
Backed by GOI making it one of the safest saving instrument available.

So let's see what are the tax exemption benefits of PPF making it such an attractive investment.

Tax exemption benefits of PPF

Annual contributions made to the PPF account are exempted from tax under Section 80C of income tax. Currently Rs. 1,50,000 (FY 2015-16) is the amount that can be claimed under 80C, but that doesn't mean all of that Rs. 1,50,000 has to be invested in PPF compulsorily. Rs. 1,50,000 is the total amount that can be claimed for deduction under 80C.

As Example - Let's assume a person is contributing Rs. 40,000 to his EPF (Employee Provident Fund) account and also has an insurance policy for which annual premium is Rs. 20,000. Since EPF contribution and insurance premium can also be claimed as deduction under 80C, that leaves another Rs. 90,000 to be invested in case he wants to claim full exemption. That amount (Rs. 90,000) can be invested in PPF. On the other hand if a person has more money to invest then he can put Rs. 1,50,000 in PPF but based on the above scenario the exemption can be claimed only on Rs. 90,000.

Tax benefits for minor's PPF account

In case a person has two accounts one for himself and one for his minor kid then the amount that is invested in both of the accounts with in the financial year can be claimed for exemption but the upper limit of exemption remains Rs. 1,50,000. Same thing is applicable if person has 3 accounts one for himself and two for minor kids.

PPF provides EEE (Exempt-Exempt-Exempt) benefits

Before going into why PPF is termed as EEE, first lets have a little introduction on what exactly is EEE.

There are 3 ways Govt. taxes the monies invested by public at various stages of investment.
When the money is invested it goes through three stages, which are -

Contribution to an investment scheme.
Accumulation of interest.
Withdrawal stage, when the lump sum amount (sum of money invested and accrued interest) is withdrawn.

How does EEE relate to these stages?

EEE stands for Exempt, Exempt, Exempt which means -

First exempt means that the amount invested will be eligible for deduction under some section (As exp 80C) subject to the total exemption limit. The invested amount will be deducted from the total taxable income of the individual.
Second Exempt means the accrued interest will not be added to the total income and will not be taxed. Thus in case of second exempt interest earned is not taxed.
Third exempt means the income from the investment, at the time it is withdrawn, would be tax free.

With this information about EEE we can easily see why PPF is termed as EEE?

PPF is termed as EEE (i.e. Exempt, Exempt, Exempt) because

Contribution to the PPF account is exempted under 80C.
Interest earned is tax exempted, there is no TDS as in the case of FD(at the rate of 10%) if interest earned in the fiscal year is more than Rs. 10,000.
Withdrawal from the PPF account is also tax exempted.

Effective rate of return on PPF may be higher

Though the rate of interest we get on PPF is 8.7% but as we already know PPF comes under Exempt, Exempt and Exempt investment category so the effective rate of return on PPF can be much higher depending on the tax slab a person comes under.
Current tax slabs are 10%, 20% and 30%. Along with the education cess, which is 3% of the total of Income Tax and Surcharge, the tax rates come to 10.3%, 20.6% and 30.9%. Noting the point that the person doesn't need to pay any tax on the interest earned on PPF the effective rate of return can go as high as 12.59% if the person happens to fall under 30.9% tax slab.

To show it with the help of an example let us assume that person A comes under 30.9% tax slab as his taxable income is more than Rs. 10,00,000. If he has invested Rs. 1,00,000 in PPF then he earns Rs.8700 at the rate of 8.7%. Now if that return is not exempted but taxed then he has to pay 30.9% tax on this interest income of 8700. In that scenario, when he has to pay tax at 30.9% on interest income, he will have to earn an interest income of 12590 to have a post-tax return of Rs.8700.

12590 * 30.9/100 = 3890.31

12590 - 3890.31 = 8699.69

So with this logic the effective rate of return, for a person who comes under the 30.9% slab, comes to 12.59%.

Effective rate of return, for a person who comes under the 20.6% slab, comes to 10.96%.

Effective rate of return, for a person who comes under the 10.2% slab, comes to 9.69%.

Same thing can also be understood in a different way, if one hadn't shown the investment of Rs. 1 Lakh then one would have paid taxes at 30.9% (assuming the person falls in 30.9% tax bracket) on that Rs. 1 Lakh. So in a way one is investing only Rs. 69,100 to get an interest of Rs. 8,700.

Let's do the math again -

Amount of tax payable if that 1 Lakh was not invested

1,00,000 * 30.9/100 = 30,900

Thus actual investment is

1,00,000 - 30900 = 69,100

To get return of Rs. 8,700 on the invested amount of Rs. 69,100 the rate of return should be 12.59%.

69,100 x 12.59/100 = 8699.69

By this calculation again the effective rate of return for a person who comes under the 20.6 % slab is 10.96% and for a person who comes under the 10.2% slab it is 9.69%.

Thus PPF, apart from being a safe investment avenue and having almost zero volatility can provide up-to 12.59% effective rate of return for tax payers. PPF being EEE category investment brings a huge benefit of not to pay any taxes on the invested amount at any of the three stages.

Points to note -

Annual contributions to the PPF account are exempted from tax upto the maximum limit of Rs. 1,50,000.
Minimum amount that has to be deposited in the PPF account in the financial year is Rs.500.
Maximum limit is Rs. 1,50,000 which is the current exemption limit, so if there is any increase in exemption limit then the maximum investment limit in the PPF account may increase too.
PPF is EEE investment which means PPF is exempted from tax across all three stages.
Effective rate of return on PPF may be much higher because of it being EEE investment.
Investment schemes may be categorized under EEE, ETE and EET.

That's all for this topic Public Provident Fund (PPF) Tax Exemption Benefits. If you have any doubt or any suggestions to make please drop a comment. Thanks!

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Public Provident Fund (PPF) Interest Rate/Interest Rate Calculation

The interest earned on PPF is not fixed but benchmarked to Government securities. The government declares the interest rate payable on PPF every financial year. Generally government declares the PPF interest rate, for the next financial year, in the last week of March.

PPF offers 25 basis points higher than the yield of 10-year government bonds. Thus the rate of interest earned on PPF may come down if Govt. bond yield comes down and may go up in case the yield goes up.

For fiscal year 2015-16 government has announced interest rate of 8.70 per cent. which is same as the last fiscal year.

Update: Earlier the interest rates for the small saving schemes like PPF, SSY, NSC used to be declared annually once. From FY 2016 - 2017 the rate of interest will be reviewed every three months so interest rate on small saving schemes will be fixed on quarterly basis and may change every quarter.

Interest Rates for PPF

April 1, 2016 - June 30, 2016 : 8.10%
July 1, 2016 - September 30, 2016 : 8.10% 
October 1, 2016 - December 31, 2016 : 8.00% 
January 1, 2017 - March 31, 2017 : 8.00%
April 1, 2017 - June 30, 2017 : 7.90%
July 1, 2017 - September 30, 2017 : 7.80%
October 1, 2017 - December 31, 2017 : 7.80% 
January 1, 2018 - March 31, 2018 : 7.60%

One of the biggest point going in the favour of PPF is that the interest earned on the scheme is completely tax free.

PPF interest rate calculation

It is very important to know how the interest on the PPF is calculated so that the rate of return on that investment can be maximized by investing amount at the proper time.

The interest on balance in your PPF account is compounded annually and is credited at the end of the year. But the point to remember is that the interest calculation is done every month which means the interest is calculated on lowest balances in account between 5th and last day of the month. So if you don't deposit on or before the 5th of a month, you don't earn interest for that month.

To make it a little technical; in case of monthly interest calculation, interest bearing balance method is used. Formula for the same is

Interest = Total Amount x 1/12 x Rate/100

Where total amount is the amount in the PPF account at any given month end.

As Example -

If total amount in the PPF account at the end of any given month is Rs. 1,00,000 then interest for that month would be (Considering the interest as 8.7%).

Interest = 100000 x (1/12 x 8.7/100)
         = 100000 x 0.00725
         = 725

Going by that method if we take three scenarios -

Rs. 60,000 deposited between Apr 1st and Apr 05.
Rs. 5,000 deposited every month between the 1st and 5th of that particular month.
Rs. 5,000 deposited every month after the 5th of that particular month.

Considering the interest as 8.7% the interest earned at the year end for these 3 scenarios would be.

Rs. 5,220 when Rs. 60,000 deposited between Apr 1st and Apr 05.
Around Rs. 2850 when Rs. 5,000 deposited every month between the 1st and 5th of that particular month.
Around Rs. 2400 when Rs. 5,000 deposited every month after the 5th of that particular month.

It's easy to see that lump sum investment at the start of the year (between Apr 1st and Apr 5th) will fetch the highest return.

Points to note -

Interest rate for PPF is not fixed and subject to change every quarter from FY 2016 - 2017.
Minimum deposit of Rs. 500 has to be done in a fiscal year otherwise PPF account will be deactivated.
Ideal scenario would be to deposit 1,50,000 between Apr 1st and Apr 5th in order to fetch maximum interest. A nice article for the best time to investment can be seen here - http://www.ppfaccount.in/ppf-investment-period.html
Make sure to deposit between 1st and 5th of the month in order to get interest for that particular month.
PPF is EEE investment which means PPF is exempted from tax across all three stages of investment.

That's all for this topic Public Provident Fund (PPF) Interest Rate/Interest Rate Calculation. If you have any doubt or any suggestions to make please drop a comment. Thanks!

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