Medical Emergency? Know how to withdraw from PPF

PPF Withdrawal Rules: How to Withdraw Partial & complete PPF

Public Provident Fund (PPF) was introduced in India in 1968 with the objective to mobilize small saving in the form of investment, coupled with a return on it. It can also be called a savings-cum-tax savings investment vehicle that enables one to build a retirement corpus while saving on annual taxes. Anyone looking for a safe investment option to save taxes and earn guaranteed returns should open a PPF account. Public Provident Fund (PPF) scheme is a long term investment option that offers an attractive rate of interest and returns on the amount invested. The interest earned and the returns are not taxable under Income Tax. One has to open a PPF account under this scheme and the amount deposited during a year will be claimed under section 80C deductions.

The current environment of Covid which has effected many families who have lost savings and require more funds can easily withdraw from PPF Account – Public Provident Fund. The article will help you with features and maximum amount of withdrawal

Features of Public Provident Fund:

Below are the main features of Public Provident Fund:

1. Frequency of Deposit: The person holding PPF account can deposits into PPF account at least once every year for 15 years.

2. Tenure of PPF deposit: Public Provident Fund has a minimum tenure of 15 years, which can be further extended in blocks of 5 years as per the choice of the account holder. It is important to note that a PPF account cannot be closed before maturity.

3. Limit for Investment: PPF allows a minimum investment of Rs 500 and a maximum of Rs 1.5 lakh for each financial year. Investments can be made in a lump sum or in a maximum of 12 instalments.

4. Mode of PPF deposit: The account holder can deposit into a PPF account either by way of cash, cheque, Demand Draft or through an online fund transfer.

5. Risk factor: Since PPF is backed by the Indian government, it offers guaranteed, risk-free returns as well as complete capital protection. The element of risk involved in holding a PPF account is minimal.

6. Joint accounts: A PPF account can be held only in the name of one individual. Opening an account in joint names is not allowed.

7. Tax benefit: PPF are deductible under Section 80C of the Income Tax Act up to Rs. 1.5 lakhs. Also, the interest is also exempt from tax

What is the procedure for withdrawal of PPF?

As per rules, the account holder can fully withdraw the PPF account balance only upon maturity i.e. after the completion of 15 years. Upon completion of 15 years, the entire amount standing to the credit of an account holder in the PPF account along with the accrued interest can be withdrawn freely and the account can be closed.

However, if account holders are in need of funds, and wish to withdraw before 15 years, the scheme permits partial withdrawals from year 7 i.e. on completing 6 years.

An account holder can withdraw prematurely, up to a maximum of 50% of the amount that is in the account at the end of the 4th year (preceding the year in which the amount is withdrawn or at the end of the preceding year, whichever is lower). Further, withdrawals can be made only once in a financial year.

In case the account holder wants to partially or completely withdraw the balance lying in the PPF account than the same can be done by filling Form C. Form C can be obtained from the institution where the PPF deposit is being opened.

The above rule can be summarised as below

Type of Withdrawal	Time Period	On what grounds	How much?
On Maturity	After 15 years	Any	Full Amount
Partial Withdrawal	After 6 years	Any	50% of the balance
Premature Closure	After 5 years	Medical, Education	Full Amount