First, I would like to congratulate you on maintaining the PPF account for the last 15 years. PPF is an evergreen investment and will continue to prevail as one of the best debt investment option. It has a lock-in period of 15 years though it provides the option of partial withdrawal and loans in between the tenure of 15 years. Now when your account is advancing towards completion at the end of 15 years, what other options do you have to continue PPF account after maturity? Can we extend PPF after 15/20 years? Does the extension rules apply to NRIs as well? What would be the maturity amount after extension? Is there any PPF extension calculator?
Can we extend PPF after 15/20/25 Years ?
There are 3 options you can seek when your PPF account matures after 15 years:
- Close the account after maturity and withdraw the proceeds
- Extend the PPF account for a period of 5 years with fresh contribution
- Extend the PPF account for a period of 5 years without fresh contribution
Let us discuss it one at a time.
Close the account after maturity and withdraw the proceeds
You can intimate the bank/post office if you wish to close the PPF account after 15 years. The entire maturity proceeds would be paid back. Please note, 15 years should be taken into consideration from the end of 1st year in which the PPF account was opened. So, if you had opened the account on May 23, 2003, it will be mature on April 1, 2019 as the end of the year of the first subscription would be March 31, 2004.
The rule is same for Indian Residents as well as Non Residential Indians(NRIs).
How long PPF account can be extended?
What if you wish to extend the PPF account instead of closing it? You have the option of extending your PPF account in the block of 5 years, indefinitely. For example, if your account has been matured in 2019, you can extend it to 2024 and then further extend it in 2029. Extension can be done with fresh investments and without fresh investments.
PPF Extension Rules -How can I extend my PPF account?
There are some rules governing PPF extension.
Extend the account for a period of 5 years – With Fresh Contribution
If you want to extend the PPF account with fresh contribution, you need to intimate it to your post office/bank in writing by filling Form H. The same has to be informed within a year of date of maturity.
For example, if your account has matured on April 1, 2019, you need to inform it to your post office/bank before March 31,2020.
If you do not give it in writing by filling Form H and still contribute to your PPF account, the interest will not be paid on the fresh contribution. Also, you cannot claim deduction under section 80C if you have not informed your bank/post office about the extension with contribution.
Extend the account for a period of 5 years- Without Fresh Contribution
You do not need to intimate your bank/post office to extend the PPF account if you are not going to contribute any fresh amount in the account. The account would be extended automatically after 1 year but you would not be able to make any fresh deposits after that. Although you will keep earning the interest on the balance amount.
Can NRIs extend their PPF account after 15 years?
No, NRIs cannot extend their PPF account after 15 years.
But if you have already extended the PPF account with fresh contribution before becoming an NRI, you can keep contributing the amount during extension period.
For example, your PPF account has matured on April 1, 2019. You decided to extend it on February 1, 2020. On April 1, 2020, you went abroad and became an NRI after spending the required 182 days there. In this scenario, you can continue your PPF account with contribution for the extension period.
If you have chosen to extend the PPF account without contribution before becoming an NRI, your balance will keep earning interest for the block of 5 years.
PPF withdrawal after extension
Partial withdrawal from PPF during extended period – With Fresh Contribution
Partial Withdrawal is allowed once in a year by filling Form C. Hence, you can withdraw 5 times during the extension period but there is a cap on the withdrawal amount from PPF account if you are doing fresh contribution during the extension period. The amount can be maximum 60% of the corpus at the beginning of 1st extension period.
For example, if your PPF account balance at the time of extension is 40 Lakhs, you can withdraw a maximum of 24 Lakhs. This 24 Lakhs can be withdrawn at once or different amounts in 5 withdrawals totaling a maximum of 24 Lakhs. The balance amount after each partial withdrawal will keep earning interest.
Same rule applies for the second extension, you can withdraw maximum 60% of the corpus at the beginning of 2nd extension period.
Partial withdrawal from PPF during extended period – Without Fresh Contribution
Again, the partial withdrawal is allowed once in a year but there is no restriction on the amount withdrawn. You can withdraw the entire balance amount in one go. The balance amount will keep earning interest. The only restriction is 1 withdrawal in a year.
PPF Extension Calculator
You can check maturity amount by using our PPF extension calculator.
Extending PPF account till retirement sounds like an exceptional plan as the returns are tax free. You can even extend it beyond retirement as it is one of the best debt instruments. It hardly takes ₹500 to keep the account active. Though 40% of the amount is locked if you extend it with contribution, 60% is still available for partial withdrawal.
In other scenario, you can extend it without contribution as the maturity and withdrawal is tax free. Also, it offers better returns than other debt instruments and you can withdraw the lumpsum amount.
My take on this is to extend the PPF account, with or without contribution is your call.
Till then, Happy Investing!