PPF Withdrawal Rules: When & How to Access Your Savings Hassle-Free!

Public Provident Fund (PPF) Withdrawal 

The Public Provident Fund (PPF) is one of the most trusted long-term savings schemes in India, known for its tax benefits and secure returns. While opening a PPF account is straightforward, many people are confused about how and when they can withdraw their savings.

Questions like “Can I withdraw before 15 years?”,

 “What about partial withdrawals?” 

and “Is it taxable?” 

often arise. This guide will clarify the PPF withdrawal rules to help you access your funds without any hassle.

PPF withdrawal after 15 years or on Maturity - Rules & Eligibility

A PPF account matures after 15 years, starting from the end of the financial year in which it was opened. At this point, you have two options:

1. PPF withdrawal  - Withdraw the Entire Amount

Once your PPF account completes the maturity period of 15 years, you can withdraw the full amount (principal + interest) without any tax liability. 

PPF withdrawal form -

To do so, you need to submit a PPF withdrawal form, i.e., Form-3, at your bank or post office where you have your account. Then, the amount is credited to your bank account after processing.

2. PPF account extension  (With or Without Deposits)

If you don't want to withdraw, you can choose to continue with or without making further deposits. 

If an account is opened on behalf of a minor or a person of unsound mind, then that account can also be extended at the request of the guardian.

How can a PPF account be extended after maturity without contributing?  - Without further deposits

You can continue further for any time period without making any deposits. You will be eligible to earn interest on your balance in the account. The account holder is allowed to make one withdrawal in a year within the balance he/she has in his account.

Once a year is completed without making any deposits to an account, then you will not have the option to continue the account by making more deposits to it and earning interest on that amount.

With Deposits

The other option to continue with this scheme is by making more deposits under this scheme even after the maturity period of 15 years. 

PPF account extension form

You must apply for an extension using Form 4 within one year of maturity. By this, you can extend your PPF account for a block of 5 years.

If a person wishing to continue making deposits fails to submit the required form within one year, and then he/she tries to submit deposits, those deposits will be counted as irregular and will be refunded immediately without any interest.

A person who once decided to go with further deposits cannot change his/her decision later.

PPF partial withdrawal (After 5 Years) - Before maturity  

If someone needs to withdraw the funds earlier before the maturity period, i.e. 15 years, you can do so after the completion of the 5 years when the account was opened. 

PPF premature withdrawal Form

For this, you have to fill in Form 2. 

PPF Partial withdrawal conditions

The amount you want to withdraw shall not exceed 50% of your balance. You can withdraw a maximum of 50% of the balance at the end of either the 4th preceding financial year or the immediately preceding financial year (whichever is lower).

Also, you must have paid your loan with interest if you have taken any before going through the process of withdrawal.

While filling out the amount for withdrawal, also keep in mind that you can withdraw only once a year.

Even if an account is opened on behalf of a minor or unsound person, a guardian can apply to make the specified withdrawal by submitting the certificate.

PPF withdrawal limit

While withdrawing, you should also keep in mind that the total withdrawal shall not exceed 60%  of the balance at credit at the commencement of the block period during the block period of five years.

However, it is your choice whether you want to make withdrawals in single or yearly installments.

Example: 

If your PPF account balance in FY 2020-21 was ₹5 lakhs and in FY 2023-24 was ₹7 lakh, you can withdraw 50% of ₹5 lakh (₹2.5 lakh) in FY 2024-25.

PPF withdrawal tax implications       

PPF comes under the E-E-E (Exempt-Exempt-Exempt) concept. It states that withdrawal is completely tax-free. Plus, the Principal amount and interest earned are also tax-free.

Can I close my PPF account before 15 years, and what are the conditions?

Yes, you can close your PPF account before the completion of 15 years. Closing your account before the maturity period is generally known as the Premature Closure of a PPF account.

PPF account closure before the maturity period

Although PPF is a long-term scheme, it can be closed prematurely under specific conditions. These conditions include -

1) Medical emergencies - 

One can close his account prematurely if the account holder, his spouse, children, or parents need specific medical treatment.

For this, medical reports and other related documents are needed from the medical authority.

2) Higher education expenses  - 

An account holder can close the account before time if he/she needs to pay bills for self-study or children's study. 
For this, they are required to submit proper documents such as fee bills and admission bills from a recognized institution in India and abroad, whichever is applicable.

3) Change in residency status - 

One needs to close the account if a person changes his residency by becoming an NRI. For this, you need to submit a copy of your passport and visa or income tax return.

What documents are needed for the premature closure of PPF?

Different account holders may have different reasons for the premature closure of their PPF accounts. So, the documents needed for the closure of an account also vary depending on the reasons. Some of the documents needed may be - 

- Medical Certificates by recognized authority
- Fee Bills for higher studies
- Copy of Passport etc 

PPF closure rules - Penalty 

Keep in mind that accounts opened under this scheme cannot be closed before the expiry of 5 years.
But if someone prematurely closes the account because of the above-mentioned conditions, then the interest rate will be lowered by 1 percent.

PPF Account Closure Form

To close the account prematurely, the account holder needs to submit Form 5. 
The guardian also has the same right if he/she wants to close the account of a minor or a person of unsound mind. 

PPF Withdrawal on Death of Account Holder

In case the account holder is deceased, then the PPF account is closed. 

The nominee or the legal heir is not allowed to continue the account. Interest is paid until the end of the month preceding the claim.

        The PPF scheme is designed to encourage long-term savings, but it also offers flexible withdrawal options for different situations. Understanding these rules ensures that you can access your funds when needed while maximizing your savings benefits.

Whether you plan to withdraw at maturity or make a partial withdrawal or want premature PPF account closure, knowing the right steps can make the process smooth and hassle-free.

Note: Always check the latest PPF interest rates and policies before making any decisions!