What are the PPF withdrawal rules?

What are the PPF withdrawal rules?

The Public Provident Fund (PPF) is a popular investment scheme offered by the Indian government that provides a secure and stable investment option for investors. One of the key benefits of investing in the PPF scheme is that it allows investors to make withdrawals when required. However, there are certain rules and regulations that govern PPF withdrawals. In this blog post, we will discuss the PPF withdrawal rules in detail.

PPF Withdrawal Rules

1) Withdrawals can be made after the completion of the sixth financial year:

The PPF scheme has a minimum tenure of 15 years. However, investors can make partial withdrawals from their account after the completion of the sixth financial year from the date of opening the account.

2) The amount of withdrawal is limited:

The amount that can be withdrawn from a PPF account is limited to 50% of the balance at the end of the fourth financial year preceding the year of withdrawal or the balance at the end of the immediately preceding financial year, whichever is lower.

3) Only one withdrawal is allowed per year:

Investors are allowed to make only one partial withdrawal in a financial year. This means that once a withdrawal is made, investors will not be allowed to make another partial withdrawal until the next financial year.

4) The withdrawal request must be made in writing:

To make a partial withdrawal, investors need to submit a written application to the bank or post office where the PPF account is held. The application should clearly mention the amount of withdrawal requested and the reason for the withdrawal.

5) Tax implications:

The amount withdrawn from a PPF account is tax-free. However, if the withdrawal amount exceeds the limit prescribed by the government, tax will be applicable on the excess amount.

6) No withdrawals are allowed during the first five years:

Investors are not allowed to make any partial withdrawals from their PPF account during the first five financial years.

7) Account closure after maturity:

After the completion of the 15-year tenure, investors can choose to withdraw the entire balance or extend the account for an additional five years. If the account is extended, withdrawals can be made once a year.

Conclusion

The PPF scheme is an attractive investment option for individuals who are looking for a safe and secure way to invest their money. The scheme allows partial withdrawals after the completion of the sixth financial year, subject to certain conditions. However, investors must carefully consider the withdrawal rules and other terms and conditions of the scheme before investing in it. It is important to note that premature withdrawals can impact the final corpus and should be made only in case of emergency.

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