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PPF Withdrawal

PPF Withdrawal Rules

Last Updated 31st Oct 2020

  • You can make a partial withdrawal from the PPF account after completing 6 years.
  • Complete withdrawal of PPF balance is allowed only at the time of maturity.
  • After 5 years you have the option of premature closing of the PPF account only on specified grounds.
  • The tenure of PPF can be extended in blocks of 5 years after completing 15 years.
  • The tenure can be extended with fresh deposit or even without it as per your discretion.
  • Maximum of one partial withdrawal is allowed during the extended period.
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What is PPF Withdrawal?

Public Provident Fund or PPF is a tax-free scheme offered by the government of India. PPF Scheme was started by The National Savings Institute of the Ministry of Finance in 1968 to encourage saving and provide moderate returns to employees. PPF account has a lock-in period of 15 years. The amount in the account can be accessed only at the end of that period. However, individuals can make partial withdrawals, after the end of the 6th financial year from account opening. Further, they can also choose the option of premature closure after five financial years, on medical and educational grounds.

PPF Withdrawal on Maturity

Public Provident Fund Account matures after 15 years. Individuals are provided with the option to withdraw the entire fund on maturity.

PPF Withdrawal Rules on Extension

PPF account holders are provided with the option to extend the tenure of their PPF account, the tenure can be increased in a block of 5 years at a time. If individuals do not close the PPF account or withdraw the corpus, the tenure for PPF is automatically extended. The account then fetches interest according to the applicable rate of interest.

Withdrawal after simple extension

If the PPF account holder extended the account by a block of 5 years, they can withdraw the available amount in the account before the extension is started. Only one PPF withdrawal is allowed per year after the extension.

Extension with contributions

PPF account holders can also choose to extend the account with an additional contribution. This allows them to keep contributing to the PPF account and earn interest on it along with interest on your existing corpus. However, this extension can only be availed if the individuals have submitted Form H to extend the PPF account, within one year of the original date of the maturity of the account.

Withdrawal after extension with contributions

After the extension of the account with contributions, the account holders are allowed only to withdraw 60% of the balance accumulated at the time of extension over the block of 5 year period. In addition, he can only make one withdrawal per year.

PPF Premature Closure

Individuals can choose to close their PPF account prematurely, instead of withdrawing from it, after completion of 5 financial years. However, premature closure is allowed only when an individual fulfils the following PPF withdrawals rules –

  • In case of treatment of life-threatening disease or ailments faced by account holders/ parents /dependent children.
  • In case of higher education of account holders or their children’s further education.

Procedure of Partial or Complete Withdrawal of PPF

  • Individuals are required to fill up Form C.
  • Some of the relevant details required are; PPF account number and the amount to withdraw, how many financial years have been completed since the opening of the PPF account.
  • Submit the PPF passbook.
  • The bank will check all the details and eligibility of the account holder for the withdrawal.
  • Individuals can get the amount credited to their savings account or get a demand draft (DD) for the same.

PPF Withdrawal Taxability

Public Provident Fund falls under Exempt-Exempt-Exempt category. So, all deposits made under PPF are exempt from taxation. Further, the interest applicable and the accumulated amount is also tax-free at the time of withdrawal.

FAQs

Can anyone withdraw money from a PPF account before maturity?

Yes, PPF provides the option of partial withdrawals. One is allowed to withdraw up to 50% of the balance in the Public Provident Fund account after completion of five years from the end of the year in which the initial amount was made.

Can I withdraw PPF amount online?

Yes, PPF provides the facility of online withdrawals. Individuals can visit the official website and can apply for the withdrawals using their online account details.

Can PPF accounts be closed?

Yes, premature closure of the Public Provident Fund account is allowed after five financial years after the account is opened.

Can I withdraw PPF after five years?

Yes, you can withdraw PPF after five years. Individuals are allowed to withdraw up to half of the balance in the PPF account after completion of five years from the end of the year in which the initial subscription was made.

Can we close the PPF account after five years?

Yes, premature closure of the PPF account is allowed after five financial years after the account is opened. However, It is allowed only in the case of Life-threatening ailment diseases faced by the PPF account holder/partner/children or Children’s higher education.

What is the minimum lock-in period for PPF account?

The minimum lock-in period of PPF is 15 years, and the money can be withdrawn in full after its maturity period. However, individuals are provided with the options of premature withdrawals, which can be made from the start of the seventh financial year.


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