PPF Account Withdrawal Rules
5paisa Research Team
Last Updated: 28 Dec, 2023 04:17 PM IST
Want to start your Investment Journey?
Content
- What are PPF account withdrawal rules?
- Types of withdrawal that are allowed under a PPF account
- What are PPF Withdrawal Rules on Extension?
- PPF withdrawal rules after application of simple extension by a block of 5 years
- Simple extensions with additional contributions
- Procedure for a Partial or Complete Withdrawal of Funds from PPF
- Tax Implications on PPF Withdrawals
- Premature Termination of PPF Account
- Conclusion
The PPF investments come with several taxation advantages. They help applicants to claim tax exclusions on the earned interests from the investments with the accumulated amount for completing the financial requirement of post-retirement.
The present rate of interest applicable on PPF is 7.1% per year. The Finance authority set the interest rate of PPF every year that is compounded each year and paid off on 31st March.
What are PPF account withdrawal rules?
As per the PPF account withdrawal rules, there are demanding procedures and regulations regarding the PPF amount extraction. It is imperative to find out about the process of premature withdrawal, withdrawal, taxability and loan facility.
The PPF plan also involves a lock-in timespan of fifteen years. The contributions that are made towards the account with the interest amounts that have been produced can be easily withdrawn only after the PPF scheme duration is completed.
Nevertheless, under specific scenarios, you can choose to withdraw partial or close the bank account prematurely.
However, if you are willing to choose fractional withdrawal of PPF, the following points mentioned need to be considered:
• Candidates can access the facility for fractional withdrawal only when the financial year of five years has been completed.
• One can withdraw till 50% of the existing balance that is accessible after the completion of four financial years.
• A single fractional withdrawal is permitted within one financial year.
• Candidates will need to submit their passbooks with their application forms.
• The amount one will withdraw shall be free of tax charges.
Types of withdrawal that are allowed under a PPF account
The PPF account comes with different categories of withdrawal schemes, as mentioned in the PPF account withdrawal rules. They are as follows:
• Post-maturity
• Partial or fractional withdrawal
• Premature closure
What are PPF Withdrawal Rules on Extension?
As you have completed the PPF account extension, you are allowed to withdraw the particular amount that was parked in the account during maturity. You can also make a single withdrawal under a financial year according to the PPF account withdrawal rules.
PPF withdrawal rules after application of simple extension by a block of 5 years
As mentioned in the PPF account withdrawal rules, applicants are free to opt for extending their PPF account tenure for any duration of time they wish to. However, they can only extend it within the limitations of only five years at one time. If they do not withdraw any funds from the particular account or enclose it, the PPF tenure will automatically be extended. This account will then continue to produce interests as per the default interest rate along with the accumulated balance.
Simple extensions with additional contributions
Under the public provident funding scheme and the PPF account withdrawal rules, one is permitted to lengthen their PPF account with the contribution. The extension of the PPF account lets you initiate contributions. Based on those contributions, the interests shall be generated.
Nevertheless, one must submit Form H for application a minimum of one year prior to the date of maturity of the extended PPF account. If an applicant fails to submit the form, further contributions will not be granted. On the other hand, if the contributions are not completed, the PPF account will be counted as an irregular one that will have no tax advantages. This information can be viewed under the Income Tax Act of Section 80C.
Procedure for a Partial or Complete Withdrawal of Funds from PPF
Applicants who are willing to withdraw the funding from their PPF account either fully or partially can do the same by deferring the application for PPF account withdrawal rules through Form C in the specific branch of a bank.
• The particular PPF withdrawal form is accessible for downloading from the landing page of the specific bank.
• There are three unique sections included in the form.
• The third section of the form needs candidates to fill in the requirement information of the banking institutions at which the fund has been withdrawn and is yet to be accredited. This fund can be accredited via a demand draft or a cheque completed in favour of the financial institution.
While you are applying for your fund withdrawal, it is compulsory for candidates to close their PPF passbook copy with the help of the form.
Unlike other plans, for which the applications for withdrawals are performed online, you will not be able to access the online withdrawal facility. Those who are aiming to withdraw cash from their PPF are fully or partially required to submit the forms to their banks via the offline procedure.
Tax Implications on PPF Withdrawals
PPF withdrawals are either wholly or partially are the investment category of free of taxation under the Income tax section of 80C, 1961. This is because all the deposits are completed under the exempt PPF taxation. In addition to that, the interest accrued and the applicable amount are free from the implications of taxation during the duration of withdrawal.
Premature Termination of PPF Account
As per the PPF account withdrawal rules and regulations suggests, applicants can opt for closing their public provident fund account on a premature basis. Rather than withdrawing from the account after completing five consecutive financial years as per the following criteria:
• In order to use the accrued savings for severe health ailments or any sort of medical urgency of the individual’s spouse, children or dependent children
• Financing the higher education of the account holder or their children’s future education
Conclusion
Nevertheless, you should cautiously review the terms of PPF account withdrawal rules or the regulations of premature fund closure. The accounts that have been extended gathered significant amounts that can surge them over the period of post-retirement.
More About Savings Schemes
- Section 194IC
- PF Form 11
- Form 13 For PF Transfer
- EPF Form 20
- Corporate Fixed Deposit
- Fixed Deposit (FD) vs Recurring Deposit (RD)
- Income Tax on Recurring Deposit RD
- How to Withdraw Money from Unclaimed EPF Account
- How to Get Your Name Changed in the EPF
- Steps to Upload KYC for EPF UAN
- EPF Payment
- Difference between GPF, EPF, and PPF
- Difference Between APR vs APY
- Atal Pension Yojana Tax Benefits
- How To Open Atal Pension Yojana (APY) Account Online
- How to Close Atal Pension Yojana Account
- How to Change Details in Atal Pension Yojana Scheme
- NPS v/s SIP
- NPS Lite Aggregators List
- NPS Customer Care Number
- National Pension Scheme for NRI
- National Pension Scheme (NPS) Withdrawal Rules
- Best Child Investment Plans In India
- Post Office PPF Account
- PPF Account Withdrawal Rules
- PPF Deposit Limit
- PPF Account Age Limit
- PPF Account for Minors
- PPF Online Payment
- ELSS Vs PPF
- Loan Against PPF
- Post Office PPF Interest Rate
- PPF Interest Rates 2023 - 24
- What is Pradhan Mantri Jan Arogya Yojana
- Balika Samridhi Yojana
- What is member ID in PF?
- How To Merge Two UAN Numbers Online
- How to Merge Two PF Accounts?
- How to Raise Grievance in EPFO
- How to Check PF Balance in Mobile: A Comprehensive Guide
- How to Download Your EPF Passbook: A Comprehensive Guide
- TDS on PF Withdrawals: A Comprehensive Guide
- How to Transfer Your PF from One Company to Another?
- EPF vs PPF
- PF Balance Check with UAN Number Without Password
- PF Balance Check without UAN number
- Introduction to Savings Schemes
- Difference Between VPF And PPF
- EPF Form 10D
- NPS vs PPF
- Superannuation Meaning: What is Superannuation
- What is Fixed Deposit?
- Pradhan Mantri Awas Yojana
- Atal Pension Yojna vs NPS
- NPS (National Pension Scheme Charges)
- EPF vs EPS
- EPF Form 2
- What are Tier 1 and Tier 2 in NPS?
- NPS Tier 2
- NPS Tier 1
- Senior Citizen Saving Scheme (SCSS)
- General Provident Fund (GPF)
- Pension Fund Regulatory & Development (PFRDA)
- SBI Annuity Deposit Scheme
- GPF Interest Rates 2023
- Unit Link Insurance Plan (ULIP)
- List of Bank Mergers
- PRAN Card
- Foreign Currency Non Resident Account (FCNR)
- What is EDLI?
- What Is NPS Interest Rates?
- What is Form 15g
- Saksham Yuva Yojana
- Why Invest in PPF?
- How To Check PPF Account Balance
- NSC Interest Rate
- NSC – National Savings Certificate
- Swavalamban Pension Yojana
- KVP Interest Rate
- PF Withdrawal Rules 2022
- NPS Returns
- National Pension Scheme (NPS)
- Jeevan Pramaan Patra - Life Certificate for Pensioners
- Kisan Vikas Patra (KVP)
- PF Form 19
- PF Withdrawal Form
- EPS - Employee Pension Scheme
- PPF Withdrawal
- Atal Pension Yojana (APY)
- EPF Form 5
- EPF Interest Rate
- Check Your PF Balance Online
- Employee Provident Fund (EPF)
- UAN Registration & Activation Online
- UAN Member Portal
- Universal Account Number
- National Savings Scheme
- Post Office Tax Saving Schemes
- Post Office Monthly Income Scheme
- Post Office Savings Schemes
- EPF Claim Status
- EPF Form 31
- EPF Form 10C Read More
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.
Frequently Asked Questions
If you are a PPF account holder, you are entitled to withdraw funds only when your account has completed five financial years from the account opening day. Apart from that being said, fractional withdrawals are also permitted prior to the maturity completion of the account. It takes place after the sixth financial year from the account opening date. However, there are specific factors that you will need to keep in mind based on your scenario before you withdraw your PPF after three years of tenure.
According to the PPF account withdrawal rules, one can continue investing for a timespan of a maximum of five years duration after the completion of the maturity period of fifteen years. One will need to apply for an extension of PPF either without or with the contributions after that.
One can take out funds partially after the completion of the five financial years. However, as per the PPF account withdrawal rules and regulations, one can withdraw only 50% of the overall balance in the account at the end of the fourth financial year.
The PPF is an investment plan with a fifteen-year tenure that serves you in the long run. The account holders will be eligible to make fractional withdrawals prematurely from their respective PPF accounts after five financial years have been completed from the account opening date.
With the help of a digital account, one can easily access their PPF account details and post a request for online withdrawals.