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The <keyword id="47209" type="ORGANIZATION" weightage="100" keywordseo="Finance-Ministry">Finance Ministry</keyword> today has said that subscribers of the Public Provident Fund (<keyword id="76579" type="CITY" weightage="100" keywordseo="PPF">PPF</keyword>) can prematurely close their deposit scheme once they have completed five financial years, citing reasons like higher education or expenditure towards medical treatment. 
 
"A subscriber shall be allowed premature closure of his account or account of a minor of whom he is the guardian on ground that amount is required for treatment of serious ailments or life-threatening diseases of the account holder, spouse or dependent children on production of supporting documents from competent medical authority," said a notification from the Finance Ministry. 
 
It added that the allowance will be applicable to the requirement of higher education of the account holder or the minor account holder when the documents and fee bills are produced, confirming admission in a recognised institution in India or abroad. 
 
<a href="http://www.enemyofdebt.com/wp-content/uploads/2015/10/EOD_SavingsLoanPic.jpg">Image source</a>

Finance ministry has decided the terms for premature PPF withdrawal

Both Public Provident Fund (PPF) and Equity Linked Savings Scheme (ELSS) are saving schemes that are eligible for tax benefits. Hence investors are often confused on which one to choose among these two. Are they similar? No doubt PPF has been popular among the investors for so long. However, these days, ELSS seems to be picking up fast due to the higher returns it promises. In fact, it is important to know that there is nothing similar between these two investment vehicles beyond the tax benefits they carry. When you know the About PPF Public Provident Fund (PPF) is a savings scheme created by the government that assures guaranteed returns and some attractive tax benefits under Section 80C. The government revises the interest rates of this scheme during every quarter. For example, the interest rate for the current quarter Q 2 (July-September), FY-19 is fixed at 7.9%. About ELSS <keyword id="3832316" type="PERSON" weightage="20" keywordseo="Equity-Linked-Saving-Scheme">Equity Linked Saving Scheme</keyword> (ELSS) can be described as a type of <keyword id="6354820" type="DEFINITION" weightage="20" keywordseo="mutual-fund">mutual fund</keyword> that carries tax benefits under the section of 80C of the Income Tax Act, 1961. Currently, it has become immensely popular due to its high returns and the lowest lock-in period. PPF Features Low-Risk Since PPF is a government-backed savings scheme, it is considered as a safe investment option available in India. Since the capital and returns are safe, it is one of the most popular investment options. Tax Benefits Since the investments in PPF fall under the exempt-exempt-exempt (EEE) category, the PPF deposits are never taxed at any point. The investment up to a limit of 1.5 lakhs per annum, the monthly interest and the maturity amount is completely tax exempt. Lock-in Period Deposits in PPF are characterized by a mandatory lock-in period of 15 years. Nevertheless, it is possible to take a loan on PPF deposits starting from the 3rd to 6th financial year from the date of opening the account. From the 6th year, partial withdrawal is possible. Fixed Returns In an average, the investments in PPF have invited 8% interest over the past. Also since the government decides the interest rate during every quarter, PPF assures fixed returns. Investment and Withdrawal The minimum and maximum investment you can make in a PPF investment account is Rs 500 and Rs 1.5 lakhs respectively. In case of serious ailments, premature closure is allowed. Partial withdrawals are permitted from the 6th year. ELSS Features High Returns Studying the history, we find that ELSS has always assured one of the highest returns among the tax-saving instruments. In the past, it has generated about 11-14% returns in a time frame of 3-years and 5-years. However, since the returns under ELSS are market-linked, they are not market guaranteed. Tax Benefits Section 80C allows tax benefits on ELSS investments up to Rs. 1.5 lakhs per year. However, while PPF is tax-free during all stages, the gains from ELSS scheme is taxable if it exceeds Rs. 1 lakh in a given year. Lock-in period Among the different tax-saving investment options, ELSS comes with the lowest lock-in period of only 3 years. Hence it carries a high degree of liquidity. SIP Option An investor can start investing in ELSS with an amount as low as Rs. 500 per month through <keyword id="6359303" type="DEFINITION" weightage="20" keywordseo="systematic-investment-plan">Systematic Investment Plan</keyword>. Whenever convenient, you can either start or stop the SIP. How to choose between PPF and ELSS PPF suits investors who do not want to take risks and can afford the lock in period of 15 years. Those investors who want to take only moderate risk and want to earn a higher interest can go for ELSS.

Comparison between PPF and ELSS, which is better?

Currently, one-third of India's population reside in cities and it is estimated to go up to 50 per cent by 2030. There is a steady rise in the number of households with a shift towards nuclear families and increased urbanisation. The 66 per cent young population - below 35 years of age, are emerging as young millennial borrowers of home-loans. It is also true that home-loans market is driven by young borrowers within the age group of 26-35 years - about 25 per cent and also by people in the age group of 36-45 years - about 28 per cent. These are all active home-loan audience and jointly account for 53 per cent of annual originations. The average ticket size of a home-loan of young borrowers has continued to increase over the last 5 years, with a CAGR of 6.2 per cent. The ticket size continues to increase more for women than men. The cumulative active home-loan base of these borrowers has seen continuous growth over the last 3 years at a CAGR of 3.5 per cent. These young borrowers have been the reason for change in the home-loan market. Within the affordable segment, volume growth in home-loans of Rs 15-35 lakh, over the last 4-5 years, indicate shifting preferences of buyers towards higher ticket sizes. Rural Housing demand for mid-range and higher ticket sizes has continued to increase over the last 5 years too. Share of annual originations (volume) of Rs 35-75 lakh ticket size has increased by 4 per cent in the last 5 years. Share of annual originations of Rs 75 lakh plus ticket size has increased from 0.37 per cent to 0.87 per cent in the last 5 years. Share of annual originations of Rs 15 lakh ticket size has declined over the last 5 years, largely due to falling demand for very small ticket size segment of Rs 2 lakh. The dearth of disposable income has been a deterrent factor for salaried class towards taking home-loan and buying real-estate. Since the input cost in real-estate has increased the rates, the salaried class is left with no other option but to approach for home-loans from financial institutions. Interestingly, the tenure of repayment of home-loan is fluctuating between 11-30 years. There is also a deterrent factor for salaried class in home-loans and EMIs. The EMIs are no more supportive since the financial institutions first draw larger part of interest in the EMIs and principal component is kept less in more than first 50 per cent of the EMIs. As the EMIs near completion, the interest component becomes negligible and principal component is much higher. Even if the buyer has the provision of pre-payment of home-loan, he ends up paying the larger portion of principal amount rather than saving on the interest. Further, the financial institutions also levy heavy fees on pre-closure of loans. In case the buyer opts for higher tenure for loan repayment, it then makes it difficult for the buyer to invest in second property. One question that has been asked frequently is - "If the principal and interest amount are predefined, why the EMIs can't have equal amount throughout the tenure." Coming to tax benefit, repayment of principal amount in a home-loan qualifies for deduction under section 80C, which has an upper limit of Rs 1.50 lakh per annum. Since the same section - 80C, accounts a number of other investments including PF, PPF and life insurance policies etc, it becomes impossible for a buyer to take advantage of any benefit out of this section. Buyers are looking forward to increase in this limit in Union Budget-2022 since this limit has not been increased in last many years. On the tax benefit for interest payment, since under section 20(b) of the Income Tax Act, there is a cap of Rs 2 lakh per annum on the interest part of the home-loan, home-loans being larger in size, the buyers are unable to take much benefit of the same too. To extend tax benefit to the buyers the government has also added few sub-sections 80EE, 80EEA under the Income Tax Act but the volume of loan is not allowing buyers to gain desired additional benefits out of these sub-sections. What perhaps needed in the Union <keyword id="10547300" type="General" weightage="20" keywordseo="Budget-2022" source="Orion">Budget 2022</keyword> is to bring dynamic changes in the income-tax slabs and increase the rebates under section 80C, 80EE, 80EEA and 24(b) of the Income Tax Act. One of the greatest philanthropists <keyword id="310500" type="General" weightage="20" keywordseo="andrew-carnegie" source="Orion">Andrew Carnegie</keyword> said - "Ninety percent of all millionaires become so through owning real-estate." Andrew Carnegie is one of the five people who built America, the other four being Cornelius Vanderbilt, John D. Rockefeller, J.P. Morgan, and <keyword id="6629386" type="General" weightage="20" keywordseo="henry-ford" source="Orion">Henry Ford</keyword>. Harv Eker, an author and businessman, known for his theories on wealth and motivation said - "Don't wait to buy 'real-estate', buy real-estate and wait". These two statements said all about owning real-estate and what it could mean to a buyer. Globally, investment in real-estate is directly related to the future of a buyer and also growth of the economy, and so be in India. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/investment/news/budget-2022-could-consider-levying-tds/tcs-on-crypto-trading-make-it-reportable-in-sft/articleshow/88943733.cms">Budget 2022 could consider levying TDS/TCS on crypto trading, make it reportable in SFT</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/570-job-openings-at-indian-oil-corporation-for-freshers-who-havent-graduated-yet/articleshow/88948126.cms">There are 570 job openings at Indian Oil Corporation for freshers who haven’t graduated yet</a>

Budget 2022: Expectations for hike in tax deduction on home loans

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><a href="https://www.paimages.co.uk/search-results/fluid/?q=philip%20green&amp;amber_border=1&amp;category=A,S,E&amp;fields_0=all&amp;fields_1=all&amp;green_border=1&amp;imagesonly=1&amp;orientation=both&amp;page=2&amp;red_border=1&amp;text=philip%20green&amp;words_0=all&amp;words_1=all">Jonathan Short/Invision/AP</a>Sir Philip Green with model Kate Moss.</div></div></div>Favoured staff at BHS' head office were paid a collective £2 million ($2.4 million) by former parent company Arcadia as the department store was collapsing, <a href="http://www.bbc.co.uk/news/business-37608423">according to the BBC's Panorama programme</a>.However, billionaire retail tycoon Sir Philip Green, who owns Arcadia, has hit back at the claims, calling them "fundamentally untrue." Sir Philip claims the payments were made to retain key staff during the sale process.200 BHS head office staff were told they would receive the payments on June 2, according to the BBC investigation that aired on Monday night, <a href="http://uk.businessinsider.com/bhs-is-being-liquidated-and-11000-jobs-are-likely-to-go-2016-6">the same day that BHS announced 11,000 jobs would be lost at the chain</a>. The payments were transferred directly to employees' bank accounts and many dubbed it a "Philip Bonus," in reference to Arcadia boss Sir Philip Green.A spokesperson for Sir Philip told Panorama the payments were made to retain key staff during the sale process. The public relations firm working with Sir Philip provided Business Insider with the below letter from former BHS CEO Darren Topp, signalling he was behind the payments.Here's the letter in full:To whom it may concern:Background We reduced the Head Office number by just over 100 people at the end of January 2016 as part of driving efficiency reducing costs. Following the announcement of the CVA at the end of March 2016, almost 100 people resigned in 4 weeks. Actions When it became clear we were entering administration keeping Head Office employees was critical to our ability to sell the business whole and indeed run the business short term. This is evidenced by the the discussions we had with potential purchasers all of whom wanted to keep the Head office structure in tact. In order to stem the tide of resignations I in conjunction with the Administrator sought funds from Arcadia to offer payments to the Head Office team. These monies would then be paid to individuals on either the sale of the business , the closure of the business or when we no longer required them and would be paid in the week following their last day of work or company sale. This money allowed us to retain key people in order to continue to trade and should a successful buyer have been found the business would have had the necessary resources to be operate normally very quickly. Arcadia agreed to support the business in order to make these payments.Darren ToppEx CEO Bhs LTDA spokesperson for Arcadia also says in an emailed statement: "Prior to Panorama this evening showing a programme on BHS, they have published on their website an allegation that is fundamentally untrue. The BBC asked us to clarify the money paid."We publish here below a letter written to the BBC today by Darren Topp, former CEO of Bhs who cleared this with the administrator Duff and Phelps this afternoon. We believe this to be self-explanatory."Sir Philip Green bought BHS in 2000 for £200 million. He <a href="http://uk.businessinsider.com/bhs-inquiry-cornhill-capital-say-dominic-chappell-bid-was-a-bit-of-a-punt-2016-5">sold it for £1 in 2015</a> and the department store <a href="http://uk.businessinsider.com/bhs-in-administration-11000-jobs-risk-2016-4">collapsed into administration in April of this year</a>, less than a year after Green sold it.BHS had been struggling for years and a government report into its collapse <a href="http://uk.businessinsider.com/bhs-inquiry-mps-report-accuses-sir-philip-green-and-dominic-chappell-of-systematic-plunder-2016-7">blames under-investment and excessive dividend payouts for sending it into a downward spiral.</a> It accuses Sir Philip and subsequent owner Dominic Chappell - a twice bankrupt former racing driver - of <a href="http://uk.businessinsider.com/bhs-inquiry-mps-report-accuses-sir-philip-green-and-dominic-chappell-of-systematic-plunder-2016-7">the "systematic plunder" of BHS.</a>The department store had a <a href="http://uk.businessinsider.com/bhs-inquiry-hundreds-of-zombie-pension-schemes-in-the-uk-2016-5">£275 million pension scheme black hole when the chain collapsed</a> and the BHS pension scheme has fallen into the state-backed Pension Protection Fund (PPF), dubbed the "pensions lifeboat." Sir Philip Green has repeatedly said he will "sort" the funding shortfall.<a href="http://www.bbc.co.uk/news/business-37607609">The Pensions Regulator on Tuesday asked for new powers to intervene in the sale of businesses that have a final salary pension scheme like BHS to stop them being dumped.</a> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/joseph-stiglitz-trump-wrong-about-economy-2016-9">STIGLITZ: There are so many ways that Trump is wrong about the economy</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="hpbG52NTE64NRwftkqFKdZEPdhBMQ4b8" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Sir Philip Green and BHS CEO hit back at claims that favoured BHS staff got a £2 million 'Philip bonus'

The relationship between income and affordability for various income groups follows a nonlinear trend. Owning a house means investing a substantial amount of money – probably the single largest investment made by any person aspiring to purchase a house. It is obvious that many people may not have the means to buy a house and may have to look out for possible <keyword id="6357455" type="EVENT" weightage="40" keywordseo="Funding">funding</keyword> resources. Availing loans from banks or other financial institutions in the form of home loans or mortgages is one of the ways to fullfil your dream if you have a regular source of income. 
 Earlier the gap between middle-class income and cost of houses was huge, which made buying a house near to impossible. But during the last decade, the gap between the income level and the housing cost has come down significantly and more people are now interested in acquiring properties. That’s why there is increasing demand for middle-income housing. Moreover, <keyword id="6371181" type="UNKNOWN" weightage="40" keywordseo="interest-rates">interest rates</keyword> have also come down significantly, compared to what they were a few years ago. 
 
1) Avoid incurring more debts that you can handle. Since a mortgage loan involves a huge sum and a longer repayment period, it is crucial to take your repayment obligation seriously. Always remember that your home – your most important property – is at stake. Avoid applying for other loans that can be an additional burden. Keep your credit card spending in check. Whenever possible, try to pay more for your mortgage. The sooner you can complete your payments, the better. 
 
2) Arrange a fixed <keyword id="37018" type="UNKNOWN" weightage="40" keywordseo="interest-rate">interest rate</keyword> on your <keyword id="6354730" type="UNKNOWN" weightage="40" keywordseo="Home-loan">home loan</keyword>. It is recommended to choose a home loan with a fixed interest rate. Although a fixed-rate loan may start out with a higher rate, compared to a variable-rate loan, you can be assured that your monthly payment won’t change, regardless of the increased prime rate in the market. 
 
3) Consider getting a debt consolidation loan. If you are managing two or more types of loans, consider consolidating your debts for easier repayment. Consolidating or ‘merging’ your debts into a single loan can significantly lower the interest rate you are paying. 
 
4) Consider refinancing your loan. If you are in <keyword id="1009187" type="UNKNOWN" weightage="40" keywordseo="the-middle">the middle</keyword> of repayment, consider refinancing your current mortgage to lower your rate. Refinancing a loan is recommended, especially if you notice a considerable improvement in your credit score. 
 
5) Make a lump sum payment. If your finances allow you to pay your mortgage completely, do so. This way, you can be secure about your investment. 
 
6) Put in a large payment on your loan whenever possible. Instead of paying just the minimum due, try to pay more of your mortgage to cut down your balance more quickly. 
 
7) Don’t go for a loan just because it offers a very low rate. Do not sign up for a home loan just because it is offering a low interest rate. Keep in mind that a variable-rate loan is bound to change at any time during your repayment term. Half-way through your loan term, you may find that you are stuck with balloon payments, which can make repayment very difficult. 
 
8) Obtain a loan that gives you more options and flexibility. Look for a mortgage lender that offers flexible repayment options. Make sure that modification of your loan’s term is possible just in case anything unexpected takes place (for example, <keyword id="6358907" type="ORGANIZATION" weightage="40" keywordseo="unemployment">unemployment</keyword> or sickness). 
 
9) Go for a long-term mortgage. A home loan with a fixed interest rate and a reasonable repayment period will be less of a burden than a short-term loan with variable interest. 
 
10) Save for down payment. Submitting a higher down payment can reduce your loan interest rate by 20-25%. Therefore, prepare your down payment prior to acquiring a mortgage loan. 
 
11) List of savings/investments. Make a list of all the loans and savings/investments that you have made. Do you find instances where the savings/investments are giving lesser returns than the loan rates? This can typically be seen in endowment <keyword id="35450" type="COMPANY" weightage="40" keywordseo="insurance">insurance</keyword> plan, EPF and PPF, postal deposit and even ULIP. Why should you <keyword id="47916" type="UNKNOWN" weightage="40" keywordseo="invest">invest</keyword> in something when you are paying higher interest to somebody else? It is better to close all or most of these lesser returns savings/investments and divert the funds to close the home loan. 
 
12) There are ways to come out of the EMIs and make your loan tenure shorter. These include: 
1. Partial pre-payment 
2. Switching to a lower rate 3. Increasing the <keyword id="6357050" type="COMPANY" weightage="40" keywordseo="EMI">EMI</keyword> 
 
Now let us look at these options in more detail. The best part is – these options do not, in any way, add to your existing budget. 
 
13) Partial pre-payment. This is the easiest way to close a housing loan faster. The method is to make use of any one-time income such as bonus, salary arrears, gifts from friends/relatives, any windfall from the <keyword id="6357040" type="UNKNOWN" weightage="40" keywordseo="Share-Market">share market</keyword>, money from a property sold, deposits closed, tax-saving <keyword id="6362476" type="ORGANIZATION" weightage="40" keywordseo="investments">investments</keyword> maturing, closure of <keyword id="25450" type="UNKNOWN" weightage="40" keywordseo="savings">savings</keyword> that are giving you lesser returns than the housing loan, etc., to partially close the housing loan. 
 
These one-time payments help reduce the principal balance in the loan. And when the EMIs continue, they have to cover less principal. 
 
So the same EMIs require less time to close the loan. The earlier and more frequently these partial pre-payments happen, the faster you can close the loans. 
 
The author Brijesh Parnami is the CEO, Distribution at Destimoney.

You Searched For "PPF closure" and got 5 results

Finance ministry has decided the terms for premature PPF withdrawal

BI India Bureau

Comparison between PPF and ELSS, which is better?

BI India Bureau

Budget 2022: Expectations for hike in tax deduction on home loans

IANS

Sir Philip Green and BHS CEO hit back at claims that favoured BHS staff got a £2 million 'Philip bonus'

Oscar Williams-Grut

13 Ways To Manage Your Housing Finances Better

Brijesh Parnami

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