The Public Provident Fund (PPF), a government of India operated savings and investment scheme is one of the most popular investment option for long term. PPF has a maturity period of 15 years but it allows to make partial withdrawals from the fund before completion of 15 years. You can also request for premature closure of the PPF account in certain situations. Read on to know more:
Partial premature withdrawal from PPF
You can withdraw partial sum from your PPF account after the expiry of five years from the end of the year in which the account was opened. PPF allows one withdrawal every year, from the seventh financial year. The withdrawal amount will be lower of the following:
-50% of the balance at the end of the fourth financial year immediately preceeding the year of withdrawal or
-50% of the balance at the end of the preceding year.
Premature closure of PPF Account
You can request closure of your PPF account before maturity. Premature closure is allowed after five years from the end of the year in which the account was opened. 1% interest will be deducted from the date of account opening for premature withdrawal. PPF Account can be closed in the following circumstances:
- If the amount is required for the treatment of serious ailments or life threatening diseases of the Account holder, spouse or dependent children or parents, on production of supporting documents from competent medical authority
- If the amount is required for higher education of the account holder, on production of documents and fee bills in confirmation of admission in a recognized institute of higher education in India & abroad.
- In case of change of resident status of account holder
Taxation on withdrawal from PPF
The withdrawals from PPF, either partial or in whole are exempt from taxation.