PPF Withdrawal Rules

There are certain rules and conditions regarding the withdrawal of your PPF amount. It is important to know about this withdrawal process, taxability, premature withdrawal, loan facility, etc. before you withdraw it.

PPF Partial Withdrawal Rules

As part of the PPF scheme, you are eligible to partially withdraw a certain amount of money. In case you wish to opt for a partial PPF withdrawal, the below-mentioned points must be noted:

• Partial withdrawal can be made after the completion of 5 financial years from the date the PPF account was opened.
• You can withdraw up to 50% of the balance that is available after the completion of the fourth financial year.
• Up to one partial withdrawal is allowed in a financial year.
• Individuals must submit the passbook along with the application form.
• Only after the bank or post office verifies all details will partial withdrawal be allowed.
• The amount that is withdrawn is tax-exempt.

Reasons for PPF Withdrawal

PPF amount can be withdrawn after the completion of the lock-in period of 15 years. Once the 15 years PPF lock-in period is completed, you can close the account by withdrawing the entire contribution made towards the account along with the interest that has been generated.

Here are some of the common reasons for PPF withdrawal and some of the rules surrounding them:

• Due to an automatic extension - After completing 15 years of PPF account opening, you will be able to extend the PPF account by 1 or more blocks. Each block consists of a period of 5 years. In case you do not withdraw the PPF amount or close the account, it will get automatically extended. However, interest will be generated on the total amount that has been accumulated in the account.
• Simple extension – In case of an extension of the PPF account, you will be able to withdraw the amount that was available in the account at the time of maturity. Only one withdrawal is allowed in a financial year.
• Extension of PPF account via contributions – Extension of the PPF account with contributions is allowed under the scheme. By extending the PPF account, you are allowed to make contributions and interest will be generated on the contributions made towards the account as well.

PPF Withdrawal Process

In case you wish to withdraw the PPF amount completely or partially, you must submit Form C at the relevant bank or PPF post office. Given below are the three sections that are present in Form C:

• Declaration section: Under this section, you will need to give details of the PPF account number and the reason for the withdrawal of the PPF amount. You will also need to give details about the number of years the account has been open.
• The office use section: Under this section, the below details are present:
  • Date and the signature of the person who is in charge.
  • The total amount of money that can be withdrawn.
  • Total amount of money that is available in the account.
  • Date by which the previously requested withdrawal was allowed.
  • Total balance that is available in the PPF account.
  • The date when the account was opened.
• Bank details section: Under this section, the details of the bank where the amount must be credited to needs to be filled. Details of the cheque or demand draft that is being issued can also be filled in this section.

About PPF

Public Provident Fund (PPF) is an investment option preferred by many since it is backed by the Government of India and comes with an attractive interest rate and guaranteed returns. The interest earned on the PPF account is set for every quarter and is paid by the government. The applicable interest rate on PPF for the first quarter of the year, 2021-22 i.e. from 1st April 2021 to 30th June 2021 has been fixed at 7.1% per annum.

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