The Public Provident Fund (PPF) in India is a reliable longer-term savings scheme giving you tax-free returns and guarantees security via the government. With a maturity of 15 years, this scheme can be chosen in the event of retirement or some big capital requirements. The interest rate remains at 7.1 per annum for the year 2025. Knowledge about withdrawal regulations will allow wiser utilization of funds.
Partial Withdrawal Rules
Whenever sufficient completion of five financial years has been reached, one can withdraw 50% of the balance at the end of the fourth year or at the end of whichever year is lesser-in-use, the previous one. Only one withdrawal is permitted in a year, requiring Form C and the PPF passbook. These withdrawals are made free of tax to both further education and medical needs. This level of flexibility is tempered with liquidity and with long-term savings.
Premature Closure Conditions
Premature closure is allowed after five years for certain reasons, such as medical exigencies or higher education. You must furnish all supporting documentation. An interest penalty of 1% is charged on the whole interest amount earned. Form C must be submitted to a bank or post office along with the passbook. This option is useful in times of crisis.
Full Withdrawal at Maturity
You may withdraw the entire balance, including tax-free interest, after 15 years. The maturity date is considered to be from the end of the financial year in which the first deposit was made. For example, an account opened in 2010 would mature in April of 2026. Submit Form C and the passbook to conduct the withdrawal smoothly.
Extending Your PPF Account
Post maturity, you may extend your PPF account in blocks of five years, with or without further contributions. If contributed to, a withdrawal of 60% of the funds will be permissible at the beginning of the extension, after which one such withdrawal can be made each year. If not contributing, one withdrawal every year of any amount can be made. This gives growth and flexibility as rewards.
PPF Withdrawal Limits Table
| Withdrawal Type | Eligibility | Limit | Frequency |
|---|---|---|---|
| Partial Withdrawal | After 5 years | 50% of balance (4th year or prior year, lower) | Once per year |
| Premature Closure | After 5 years | Full balance, 1% interest penalty | Once, with conditions |
| Full Withdrawal | After 15 years | Entire balance, tax-free | Once at maturity |
| Extension Withdrawal | Post-maturity | 60% of balance at extension start | Once per year |
How to Withdraw
Form C has to be submitted with the PPF account holder’s passbook to the bank or the post office. From July 2025, Aadhaar-based e-KYC will enable this entire process to be done paperlessly. For premature closure, submit requisite documents like medical reports. The amount is then credited to the savings bank account linked thereto.