PPF account holders can make partial withdrawals after five years have expired from the end of the financial year in which the account was opened. According to reports from The Economic Times, this means withdrawals become available from the seventh financial year. The withdrawal amount is restricted to up to 50% of the balance standing at the end of the fourth financial year immediately preceding the withdrawal year, or 50% of the balance at the end of the immediately preceding financial year, whichever is lower. Only one such withdrawal is permitted in a financial year. The facility of partial withdrawal under PPF Scheme shall be available to the account extended, subject to the condition that the total withdrawal during the block period of five years shall not exceed sixty per cent of the balance at credit at the commencement of the block period.
Premature closure is permitted only after five years have expired from the end of the financial year in which the account was opened, and under specified circumstances. As reported by The Economic Times, the permitted grounds include treatment of life-threatening illness of the account holder, spouse, dependent children or parents; higher education of the account holder or dependent children; and change in the account holder's residency status. Supporting documents are required for any of these reasons. Premature closure comes with a financial cost as interest payable is recalculated at a rate one percentage point lower than the rates credited to the account since opening. Only in the case of the death of a customer, their nominee or legal heir can close the account by submitting the required documents as guided by the Ministry of Finance.
On completing the 15-year maturity period, the account holder can withdraw the entire balance and close the account, or retain the account without fresh deposits. According to reports from The Economic Times, the retained account continues to earn applicable PPF interest and allows one withdrawal of any amount within the available balance each year. The account can also be extended with fresh contributions in blocks of five years, during which total withdrawals cannot exceed 60% of the balance available at the beginning of each block. A customer can extend the tenure of a Public Provident Fund (PPF) investment for a block period of 5 years beyond the maturity period by submitting Form 4 within one year from the date of maturity.
Partial withdrawal is available only from regular accounts and is not permitted on discontinued accounts unless revived. As reported by The Economic Times, any outstanding PPF loan along with applicable interest must be cleared before a partial withdrawal can be made. Normally, withdrawals are made by the PPF account holder, but where the account has been opened for a minor or person of unsound mind, the guardian can apply for withdrawal for the use and welfare of that person, subject to prescribed declaration and conditions. Customers can avail the loan facility after completion of 2 years from the date of Initial subscription but before expiry of 5 years. Application must be filed in Form 2 to the accounts office and for the amount which is less than or equal to 25% of total amount of credit balance in your account at the end of 2nd year immediately preceding the year in which the loan is applied for.
