PPF Account Withdrawal Rules

The PPF investments come with several taxation advantages. They help applicants to claim tax exclusions on the earned interests from the investments with the accumulated amount for completing the financial requirement of post-retirement. 
The present rate of interest applicable on PPF is 7.1% per year. The Finance authority set the interest rate of PPF every year that is compounded each year and paid off on 31st March. 

What are PPF account withdrawal rules?

As per the PPF account withdrawal rules, there are demanding procedures and regulations regarding the PPF amount extraction. It is imperative to find out about the process of premature withdrawal, withdrawal, taxability and loan facility. 

The PPF plan also involves a lock-in timespan of fifteen years. The contributions that are made towards the account with the interest amounts that have been produced can be easily withdrawn only after the PPF scheme duration is completed. 

Nevertheless, under specific scenarios, you can choose to withdraw partial or close the bank account prematurely. 
However, if you are willing to choose fractional withdrawal of PPF, the following points mentioned need to be considered:
• Candidates can access the facility for fractional withdrawal only when the financial year of five years has been completed.
• One can withdraw till 50% of the existing balance that is accessible after the completion of four financial years. 
• A single fractional withdrawal is permitted within one financial year.
• Candidates will need to submit their passbooks with their application forms. 
• The amount one will withdraw shall be free of tax charges. 
 

Types of withdrawal that are allowed under a PPF account

The PPF account comes with different categories of withdrawal schemes, as mentioned in the PPF account withdrawal rules. They are as follows:
• Post-maturity
• Partial or fractional withdrawal
• Premature closure

What are PPF Withdrawal Rules on Extension?

As you have completed the PPF account extension, you are allowed to withdraw the particular amount that was parked in the account during maturity. You can also make a single withdrawal under a financial year according to the PPF account withdrawal rules. 

PPF withdrawal rules after application of simple extension by a block of 5 years

As mentioned in the PPF account withdrawal rules, applicants are free to opt for extending their PPF account tenure for any duration of time they wish to. However, they can only extend it within the limitations of only five years at one time. If they do not withdraw any funds from the particular account or enclose it, the PPF tenure will automatically be extended. This account will then continue to produce interests as per the default interest rate along with the accumulated balance. 

Simple extensions with additional contributions

Under the public provident funding scheme and the PPF account withdrawal rules, one is permitted to lengthen their PPF account with the contribution. The extension of the PPF account lets you initiate contributions. Based on those contributions, the interests shall be generated. 

Nevertheless, one must submit Form H for application a minimum of one year prior to the date of maturity of the extended PPF account. If an applicant fails to submit the form, further contributions will not be granted. On the other hand, if the contributions are not completed, the PPF account will be counted as an irregular one that will have no tax advantages. This information can be viewed under the Income Tax Act of Section 80C. 

Procedure for a Partial or Complete Withdrawal of Funds from PPF

Applicants who are willing to withdraw the funding from their PPF account either fully or partially can do the same by deferring the application for PPF account withdrawal rules through Form C in the specific branch of a bank. 

• The particular PPF withdrawal form is accessible for downloading from the landing page of the specific bank.
• There are three unique sections included in the form.
• The third section of the form needs candidates to fill in the requirement information of the banking institutions at which the fund has been withdrawn and is yet to be accredited. This fund can be accredited via a demand draft or a cheque completed in favour of the financial institution. 

While you are applying for your fund withdrawal, it is compulsory for candidates to close their PPF passbook copy with the help of the form. 

Unlike other plans, for which the applications for withdrawals are performed online, you will not be able to access the online withdrawal facility. Those who are aiming to withdraw cash from their PPF are fully or partially required to submit the forms to their banks via the offline procedure. 

Tax Implications on PPF Withdrawals

PPF withdrawals are either wholly or partially are the investment category of free of taxation under the Income tax section of 80C, 1961. This is because all the deposits are completed under the exempt PPF taxation. In addition to that, the interest accrued and the applicable amount are free from the implications of taxation during the duration of withdrawal. 

Premature Termination of PPF Account

As per the PPF account withdrawal rules and regulations suggests, applicants can opt for closing their public provident fund account on a premature basis. Rather than withdrawing from the account after completing five consecutive financial years as per the following criteria:   

• In order to use the accrued savings for severe health ailments or any sort of medical urgency of the individual’s spouse, children or dependent children
• Financing the higher education of the account holder or their children’s future education

Conclusion

Nevertheless, you should cautiously review the terms of PPF account withdrawal rules or the regulations of premature fund closure. The accounts that have been extended gathered significant amounts that can surge them over the period of post-retirement.