PPF Withdrawal Rules – Partial, After 15 Years & Loan

What are PPF withdrawal rules after 15 years in India? Is partial withdrawal allowed in PPF ?What are interest rates on PPF ? Where can I get the PPF withdrawal form? Can I take a loan from my PPF account?How can I save tax by investing in PPF? What is the maturity period of PPF? What are the minimum and maximum limits of investing in PPF?

Public Provident Fund(PPF) – Tax Saver under Section 80C

The Public Provident Fund (PPF) is the most popular tax savings option in Section 80C. Since the scheme is a government-sponsored scheme, there is no need to worry about the security of the amount. The scheme is the most flexible tax saver, because you can invest any amount in between Rs. 500 and Rs. 1.5 Lakh in a year depending on your requirement.

PPF –  Limits, Locking Period & Maturity

It is a 15-year scheme but it has an option to increase the term in blocks of 5 years at the end of the 15-year period. So, if you are starting the PPF at the age of 30, it will mature when you are 45. But you can extend it in blocks of 5 years any number of times. If you extend it 3 times, it will run till your age 60.

You can open the PPF account in Post Office, State Bank and its associate banks. Now private banks are also offering online facility to open the PPF account.

You must invest at least Rs. 500 in a year to keep the account in force. Otherwise, you have to pay a penalty of Rs. 50 to regularize the account. The maximum limit of investment per year is Rs. 1.5 Lakh only . You can pay this amount in lump sum or in installments.

PPF Interest Rates 2017-18

The interest rate on PPF is decided by the government every year and will be declared in advance. The current rate of interest is 8%.

Can I take loan from my PPF Account?

Since it is a 15-year scheme, there will be need for early liquidity. Yes, you can take loan from PPF from the 3^rd Financial Year to the 6^th Financial Year.

PPF Loan Rules 

Since we have already gone through the basic details of PPF. Let us go through PPF loan rules:

If you have opened the PPF account in 1999-2000, you will be eligible to take loan from the year 2001-02. Also,the amount of loan will be limited to 25% of the accumulation including the interest at the end of the 2^nd immediately preceding year. So, if you are applying loan in the year 2004-05, you will get 25% of your account balance as on 31^st March, 2003.

PPF Loan Interest Rates

The interest rate on this loan will be 2% above the PPF interest rate you receive.

PPF Loan Repayment

You have to repay the PPF loan within 36 months. Furthermore after repayment, you can again take a loan within the 6^th year.

PPF Loan Form

You can use form D to avail loan from your PPF account.

PPF Loan Form SBI – Download Here

PPF Premature Closure Rules 

If your account has completed 5 years, then under following condition you can close SBI PPF account i.e. premature closure of PPF account

• If you, your spouse ,children or parents are diagnosed with life threatening disease
• Money required for higher education of account holder or minor account holder

In both cases you need to submit the necessary documents for premature closure of PPF account.

Can PPF be withdrawn before maturity?

Yes, PPF can be withdrawn before maturity. Let us see what are PPF partial withdrawal rules:

PPF Partial Withdrawal Rules 

To meet any emergencies, from 7^th year you are eligible for partial withdrawal from your PPF account. Though, You are eligible for only 1 withdrawal per year.

But If you have opened the PPF account in 1999-2000, you will be eligible for partial withdrawal from 2005-06. The withdrawal amount will be the lower of:

1. 50% of your balance at the end of the immediately preceding year;
2. 50% of your balance at the end of the 4^th immediately preceding year.

In our example, if you are applying for partial withdrawal in 2005-06, you will get the lower of:

1. 50% of your balance as on 31^st March, 2005;
2. 50% of your balance as on 31^st March, 2002.

PPF Partial Withdrawal Form

You can use form C to avail partial withdrawal from your PPF account.

PPF Withdrawal Rules after 15 Years

After 15 years, if you are not interested in closing the account, you can also extend the term of the PPF in blocks of 5 years with or without fresh contribution. Your accumulation will get the interest every year. If you are extending without fresh contribution, you can withdraw any amount from the accumulation without any limit as per your requirement. Also,You can only withdraw once in a year.

If you are extending the PPF with fresh contribution, then you are eligible for partial withdrawal of 60% of your accumulation as on the date of extension during the next 5- year period.

PPF withdrawal rules after 15 years for NRIs

NRIs can not extend PPF account after 15 years. So, NRIs have to withdraw the amount from PPF after 15 years.

Is PPF Withdrawal Taxable?

You will get tax benefit under Section 80C while you invest and your maturity amount along with the entire interest is tax-free in PPF. So, PPF is one of the most popular tax saving tool and a good retirement savings.

Please feel free to write if you have any queries about “PPF withdrawal rules”. So what is your view on  PPF withdrawal rules?