Year-wise balance at the current rate, when you can take a loan or withdraw, and the tax the 80C deduction saves you each year.
Maturity value (tax-free)
| Total deposited | |
| Interest earned (tax-free) | |
| 80C tax saved over the period (incl. cess) | |
| Effective return incl. tax saving |
| Year | Deposit | Interest | Closing balance | Available |
|---|
About ₹40.7 lakh at 7.1% with deposits at the start of each year: ₹22.5 lakh invested, ₹18.2 lakh tax-free interest. Depositing in March instead of April costs roughly ₹2.5 lakh over the term.
Yes — EEE. Deposits qualify under 80C (old regime), interest is exempt under section 10(11), maturity is exempt. No TDS, nothing to add to taxable income. In the new regime you lose the 80C deduction but the interest stays tax-free.
Loan from the 3rd to 6th financial year (25% of balance two years prior, at 1% above PPF rate). One partial withdrawal a year from the 7th year, up to 50% of the lower of the balance at end of the 4th preceding year or the previous year. After 15 years, extend in 5-year blocks with or without deposits.
For the 80C deduction, no benefit. For a guaranteed, government-backed, fully tax-free 7.1% that beats post-tax FD returns at every slab above 10% — still worth it for the debt part of a long-term portfolio. Compare with NPS for the extra 80CCD(2) route.
Run both with your actual deductions.
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