How to partially withdraw from your PPF

The Public Provident Fund account has a 15-year lock-in period. Funds credited to it can be accessed only when this period ends. Partial withdrawals are possible subject to conditions.

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.

For example, let us assume that a PPF account was opened on February 15, 2013. The subscriber in this case can make a partial withdrawal only from FY2018-19.

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

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 The account number and amount to be withdrawn has to be mentioned in the form and signed by the account holder.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.

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

The bank/post office will verify the date of account opening to ascertain withdrawal eligibility. If eligible, the amount that can be withdrawn will be calculated.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.

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

(Content courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)