PPF withdrawal rules: complete guide for 2025
PPF (Public Provident Fund) remains India's most beloved long-term savings scheme, blending security, tax benefits, and attractive interest. But when life happens — a child's education, medical emergency, or retirement — you need to know the PPF withdrawal rules inside out. This comprehensive guide decodes every clause, form, and condition so you can access your PPF corpus without penalties or confusion.
🎯 PPF at a glance: 15-year lock-in, 7.1% p.a. (current), EEE status. But partial withdrawals are allowed from year 7, and premature closure is possible under specific conditions. Let's dive deep.
📌 1. partial withdrawal from PPF (after 6 financial years)
The most common way to take money out of your PPF account is through a partial withdrawal. You can withdraw once every year from the 7th financial year onwards (i.e., after completion of 6 years). The permitted amount is the lower of:
of the balance at the end of the 4th year (preceding year)
of the balance at the end of the immediate previous year
example If you opened PPF in FY 2018-19, you can apply for withdrawal after FY 2024-25 (i.e., 2025-26). You can withdraw up to 50% of the balance as on 31st March of 2021-22 (4th year) OR 2024-25 (previous year), whichever is lower.
📝 forms & process for PPF partial withdrawal
Use Form C (withdrawal form) available at your bank/post office. Submit it with your PPF passbook and ID proof. The amount is credited within a few days. Only one withdrawal is permitted per financial year.
⏳ 2. PPF maturity withdrawal (completion of 15 years)
When your PPF completes 15 years from the end of the year in which the account was opened, the entire corpus becomes withdrawable. You can close the account and take the entire PPF balance tax-free. But wait — you also have two golden options at maturity:
- Extend with contribution: Continue contributing in blocks of 5 years, while earning interest.
- Extend without contribution: Just let the balance grow at PPF interest rate, and withdraw any amount once per year.
🚀 extension superpower
If you extend PPF without contributions, you can withdraw any amount (not restricted to 50%) once every financial year. It’s like a flexible savings account with tax-free interest. To opt, simply submit Form H within one year of maturity.
⚠️ 3. premature closure of PPF (before 15 years)
Premature closure of PPF is allowed only under severe circumstances, and after the account has completed 5 years. Conditions accepted by the government:
In such cases, PPF premature closure attracts a 1% interest penalty (interest paid will be 1% less than the applicable rate for the completed periods). Supporting documents are mandatory.
| PPF withdrawal type | when allowed | maximum amount | penalty / forms |
|---|---|---|---|
| partial | from 7th financial year | 50% (as per rule) | Form C, no penalty |
| maturity (15 years) | after 15 years | 100% of balance | Form C, tax-free |
| premature (5 years completed) | specific hardship/education | 100% of balance | 1% interest reduction + Form E |
| extended PPF (no contribution) | after 15 years & extension | any amount (once/year) | Form C, no TDS |
🧾 4. tax treatment on PPF withdrawals
PPF follows EEE (Exempt-Exempt-Exempt) model. Amount withdrawn — whether partial, maturity, or extended — is completely tax-free. No TDS deducted. Interest earned is also exempt under section 10. That’s the beauty of PPF.
📄 5. important PPF withdrawal rules & restrictions
Beyond the basics, keep these points in mind for a smooth PPF experience:
- Nomination: If the account holder expires, nominee can claim the PPF balance (no penalty).
- Loan against PPF: From 3rd to 6th year you can take a loan (25% of balance) — cheaper than withdrawal if you need short-term funds.
- Multiple PPF accounts: Only one account per individual is allowed; if you hold more, the second one will be considered irregular and may be clubbed with penalty.
- Joint account: Not permitted; only individual.
- Withdrawal for NRI: If you become an NRI, you cannot continue PPF beyond maturity; but you can let it run till 15 years from opening. No fresh deposits after NRI status.
🔁 6. PPF withdrawal vs. loan – what’s better?
Between year 3 and year 6, you can take a loan against PPF (up to 25% of balance at 2% interest, repayable in 36 months). After year 6, partial withdrawal is usually better because it’s interest-free. Use a loan if you don’t want to reduce your final corpus.
❓ Can I withdraw from PPF every year?
Yes, after the 6th year, you can withdraw once every financial year. But the amount is limited to 50% of specific balances. You cannot withdraw every month – only one withdrawal per year.
❓ Is PPF withdrawal taxable?
Absolutely not. Entire withdrawal, including interest, is tax-free. You don't even need to show it in ITR as income.
❓ What is Form C for PPF?
Form C is the standard application for partial or final withdrawal from PPF. Available at all post offices and nationalised banks.
🧮 quick example: PPF partial withdrawal calculation
PPF opened in FY 2019-20. Balances: 31/03/2023 = ₹2,50,000; 31/03/2025 = ₹4,00,000. Financial year 2025-26 (7th year) – you can withdraw lower of:
50% of ₹2,50,000 = ₹1,25,000 OR 50% of ₹4,00,000 = ₹2,00,000 → you get ₹1,25,000
🏁 final takeaways: smart PPF exit strategy
PPF is a wealth creator if you stay invested. Withdraw only when necessary. Use the extension rule to create a pension-like tax-free stream. Remember, even after 15 years, you don’t have to close it — extended PPF with zero contributions offers unmatched flexibility. Always keep Form C handy and track your 4th year balance for maximum withdrawal eligibility.
ppf ppf ppf withdrawal rules – this guide focuses on ppf partial withdrawal, ppf premature closure, ppf maturity, ppf loan, and every aspect of ppf to ensure comprehensive coverage of ppf topic.
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