How to partially withdraw from your PPF

The Public Provident Fund (PPF) account has a lock-in period of 15 years. Funds credited to the account can be accessed only at the end of that period. However, partial withdrawals are possible subject to certain conditions.

Rules for withdrawal
One is allowed to withdraw up to 50% of the balance in the PPF account after completion of five years from the end of the year in which the initial subscription was made. One partial withdrawal is allowed in each fiscal.


Example
To understand better, let us assume that a PPF account was opened on 15 February 2013. The subscriber in this case can make a partial withdrawal only from the financial year 2018-19.

Amount eligible for withdrawal
The total amount eligible for withdrawal in a particular financial year is the lower of:
1. 50% of the PPF account balance at the end of the financial year, preceding the current year, or
2. 50% of the PPF account balance at the end of the fourth financial year, preceding the current year.

Application
Form C, available at the post office or bank where the account is, has to be submitted. The account number and amount to be withdrawn has to be mentioned in the form and signed by the account holder. A revenue stamp has to be affixed on the form.

Documents
The PPF passbook needs to be submitted along with the withdrawal application.

Process
The bank/post office will verify the date of account opening to ascertain eligibility for withdrawal. If eligible, the amount that can be withdrawn will be calculated. Next, the amount will be credited to the subscriber’s bank account or a DD will be issued.

Point to note:
Withdrawals from PPF— whether on maturity or premature— are tax free in the hands of the account holder.


(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)