PPF Withdrawal Rules - Partial or Complete Withdrawal of PPF

Accessing your savings in the PPF account is possible both partially and fully under specific rules. Below is a detailed yet simple explanation of when you can withdraw, how much you can withdraw, what forms to use, and what to check before you withdraw from your PPF account.

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What is PPF & Why Withdrawal Rules Matter

The Public Provident Fund (PPF) is a long-term savings scheme backed by the Indian government. It has a standard tenure of 15 years because it is meant for long-term savings, the rules for withdrawing from PPF are designed to allow some flexibility but also to ensure discipline.

Key Terms to Understand

• Account opening year / financial years: The rules often refer to “financial years” completed since account opening.
• Partial withdrawal: Withdrawing a part of the amount while the account is still in the 15-year lock-in.
• Complete/Full withdrawal: Withdrawing the entire amount when the account matures or under extension.
• Premature closure: Withdrawing/closing before the maturity under certain conditions.

Partial Withdrawal Rules

Here are the rules in simple language:

• Partial withdrawal is allowed only after five to six full financial years have passed since the account opening.

• National Savings Institute states “withdrawal is permissible every year from the 7th financial year”.

• Only one partial withdrawal is permitted in a financial year.

• The maximum amount you can withdraw is the lower of:

  1. 50 % of the balance at the end of the 4th financial year immediately preceding the year of withdrawal, OR
  2. 50 % of the balance at the end of the preceding financial year.

• Purpose: Partial withdrawal does not require full closure of the account; you continue the account and interest continues.

Complete Withdrawal / Maturity / Extension Rules

• The standard maturity period for PPF is 15 years (15 complete financial years from the end of the year in which the account was opened).

• At maturity you have options:

  1. Full withdrawal – you withdraw the entire accumulated amount (principal + interest) and close the account.

  2. Extend the account for further blocks of 5 years:

     • You can extend with new contributions (you keep depositing) – to do this you must fill form H within one year of maturity.
     • Or you can extend without making further deposits – you just let the existing balance earn interest.

• During the extension period (especially with contributions) there are additional withdrawal rules. For example, when extended with contributions you may withdraw up to 60% of the balance at the start of extension, once per year.

• For account holders who become NRIs or for other special cases, additional rules apply.

Premature Closure & Special Conditions

• You can close the PPF account before 15 years in certain specified cases only, e.g., serious illness, higher education of subscriber or dependent, change in residency status.
• For premature closure, conditions include that the account must have completed at least 5 financial years since opening.
• If closed early, you may lose out on full interest (sometimes interest rate applicable is reduced by 1 %).

Procedure to Withdraw

• To apply for partial withdrawal, download or collect Form C (some banks call it Form 2) from your bank/post-office where PPF account is held.
• Submit the form with required details: your account number, amount you want, reason (if required by bank), passbook etc.
• For complete withdrawal at maturity, you may need to submit the relevant closure form at your branch.
• Some banks/post-offices may allow online facilities for PPF but many require physical submission.

Benefits & Taxation

• All withdrawals from PPF (partial, full at maturity) are tax-free under current rules (subject to conditions).
• Withdrawing partially lets you access funds while still keeping the account and continuing to earn interest on remaining balance, good flexibility.
• Extending the account post-maturity continues the benefit of compounding and tax-free growth.

What to Check Before You Withdraw

• Confirm the year of opening and count of financial years completed so you know you meet eligibility for partial withdrawal.
• Check your passbook/statement for balance at the end of the required year (4th preceding / preceding) to compute how much you can withdraw.
• Ensure any minimum annual contribution for the account was made so the account is active. (PPF requires minimum deposit each year to keep account active).
• If considering full withdrawal at maturity, consider whether you want to extend the account instead (if you still have longer horizon).
• If you are an NRI or your status changed, check the specific rules for you.
• Before partial withdrawal, remember it will reduce your corpus and thus future interest earnings will be slightly lower due to lower principal.

Summary

• You open a PPF account and save for 15 years to get the full benefit.
• After about 6 financial years, you can make a partial withdrawal (once a year) up to about 50% of the balance (as per rules).
• At maturity (15 years) you can withdraw everything or extend it further.
• If you have to close early, you may do so only under special conditions and might accept some interest loss.

Used wisely, PPF is a great tool for these long-term savings needs and you can also access funds when you need them (partially) without losing the overall benefit.