Step-by-Step Process for PPF Account Withdrawal and Premature Closure

Public Provident Fund (PPF), is used by an investor as a long term investment scheme that offers attractive interest rates and tax benefits. It has a maturity period of 15-years which can be extended. The interests and returns that are earned through PPF are tax free and thus makes it a popular choice among small savers for its security and tax advantages.

Withdrawal Regulations For The PPF

Anytime after five years from the end of the year in which the PPF account was opened, the account holder can apply for withdrawal using the specified form. They can withdraw up to fifty percent of the balance in their account, either the amount at the end of the fourth year preceding the withdrawal year or the previous year's balance, whichever is lower at the time of withdrawal. However, before withdrawal, any outstanding loan amount plus interest must be paid by the account holder. This facility of withdrawal is available once per year for only active accounts.

Step-by-Step Guide for Premature Closure of PPF Account

An account holder can request an early closure of their PPF account, or the account of a minor or person of unsound mind for whom they are the guardian, by submitting a specified form to the accounts office. This can be done based on any of the following reasons:

• If there is any treatment going on for life threatening disease of the account holder, his spouse or dependent children or parents then the account holder can request an early closure upon the submission of supporting medical documents and reports, confirming the medical treatment of such disease.
• The premature closure of the PPF account will be allowed for the purpose of higher education of the account holder, or dependent children upon the presentation of fee bills and documents confirming the admission in a recognized institution in India or abroad.
• In the event of a change in the residency status of the account holder, upon submission of a copy of the passport and visa or income tax return, the premature closure of the PPF account is permissible. Provided that an account within this Scheme cannot be closed before five years have elapsed from the end of the year in which it was opened. Additionally, in the event of premature closure, the interest on the account will be allowed at a rate one percent lower than the rate at which interest has been credited since the account's opening or the date of extension of the account, as the case may be.

The Public Provident Fund (PPF) stands as a reliable avenue for long-term investment, offering not only attractive interest rates but also tax benefits. With provisions for withdrawal and premature closure, it helps individuals to avail the benefits of the scheme and tailor their financial strategy to meet various life circumstances, whether it's funding education of children, addressing medical needs of the parents, or adapting to changes in residency status within or outside the country.