Public Provident Fund a popular small savings tool

Providing a decent interest rate, tax savings on both principal and interest, and the safety of a government savings scheme, Public Provident Fund (PPF) is among the most popular small savings tool. You can invest a maximum of Rs. 1.5 lakh under Section 80C in your PPF account while a minimum investment of Rs. 500 is mandatory to keep the account alive.

Withdrawing money from PPF account as per PPF Scheme 2019

What is the maturity period of PPF Account

Your PPF account matures at the end of the 15th year when you are allowed to withdraw the full amount or keep extending it further for a block of five years.

What are the PPF withdrawal rules after 15 years

1) PPF scheme follows the financial year (April-March) as its accounting year. So for example if you opened a PPF account in March 2019, your second year will start from April 2019.

2) At the end of the 15th year you are free to close your PPF account and withdraw all your money. You have to fill up Form 3 and submit it to the post office or bank where you have the account.

3) You can choose not to close the PPF account but extend it further by a block of 5 years. This extension can be done for any number of times till the account holder is alive. You need to collect and submit Form 4 for extension of your PPF account.

Can I withdraw money from PPF account before maturity

Yes PPF Scheme 2019 allows premature closure of the PPF account on certain Grounds.

1. The account holder shall be allowed to prematurely close his account on or after the expiry of 5 years from the end of year in which the account was opened
2. Premature closure of the PPF account is allowed on grounds of serious ailments or life threatening diseases affecting the account holder, spouse, dependent children or parents.
3. Premature Closure is allowed on ground of Higher Education of Account Holder or dependent children. For this production of documents and fee bills in confirmation of admission in a recognized institute of higher education in India or abroad is mandatory.
4. As per the new scheme one can close the PPF A/C before maturity, due to change in residential status.

What is Limit on amount to be withdrawn

The amount that can be withdrawn from the PPF account, shall be maximum of 50% of the amount standing in the credit of the account at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower.

Where after maturity, the account has been extended with deposits, total withdrawal during the block period of 5 years shall not exceed 60% of the balance at credit at the commencement of the block period. Such withdrawal can be made either in a single or in yearly installments. If, however, the account holder opts to extend the account without any further deposit, no additional withdrawal will be allowable.

How to withdraw the amount

The application shall be made in Form-2. However, if the withdrawal is made from the account on behalf of a minor or person of unsound mind, then a certificate is required to be submitted by the guardian.

Other Facts to be noted

• If account holder has obtained any loan against such account, he is required to repay the amount of loan outstanding including the interest due thereon before making application for such withdrawal;
• The facility of withdrawal is available only once a year;
• Withdrawal cannot be made from a discontinued account; and
• Withdrawal cannot be made in case of extension of the account wherein the account holder opts not to deposit any amount further.

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