Jul 012015

There is certainly good news for those intending to invest in PPF.  In a recent press release, the government of India has put forth that the tax limit for PPF investment would be extended by Rs 3 lakh. Please check the current PPF Limit. This is certainly an added advantage for those already investing in PPF.  In this article, we would however focus primarily on the withdrawal rules in PPF.

Withdrawal Rules in PPF

Withdrawal Rules in PPF (Public Provident Funds)

PPF is one of the best ways to save your money and avail tax benefits in long term.  With PPF, you can keep investing in your account and start withdrawing your money after the 6th year of investment.

  • The account holder can withdraw only 50 per cent of the money retained/left in his/her PPF account by the end of 4th year of investment.
  • The withdrawal rules in PPF allows the account holder to withdraw the permissible amount from 7th year to the 12th year.
  • After 15 years, the account matures and account holder can withdraw the entire amount.

Let’s take an example.  Let’s assume that a PPF account holder has been investing Rs 1 lakh every year in his/her PPF account.  Going with this calculation, the account holder can withdraw around 1.78 lakh in the seventh year. You can also read Public Provident Fund PPF FAQ

Apart from withdrawal from PPF account, there is yet another option through which the account holder can meet their rising financial needs by taking loan against their PPF account.  From the third year, the account holder can apply for a loan against their PPF account and thereby pay the amount in installments.

The complete withdrawal of accumulated money is possible only after 15 years, however, if the account holder wishes, he/she can leave the amount in their account and choose an extended term in multiple of 5 years and get the same rate of interest and tax benefits.

If you hve any question regarding Withdrawal Rules in PPF (Public Provident Funds), you guys are free to ask me.

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