Public Provident Fund (PPF) is a popular government-backed savings scheme in India because of its guaranteed returns and tax benefits. The current interest rate for PPF is 7.1 percent and contributions made in each financial year towards PPF qualify for a deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act.
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A PPF account has a maturity period of 15 years, after which the holder can choose to withdraw funds. However, partial withdrawals are also allowed before the account matures, but only after the sixth financial year from account opening, under certain conditions. Here is all you need to know about partial withdrawals from PPF.
Important rules related to partial withdrawal before maturity:
Partial withdrawals from PPF can be made only after the sixth financial year from the account opening date.
Funds withdrawn are tax free.
Just one partial withdrawal is allowed per financial year.
Form C is required to be submitted to make partial withdrawals from the PPF account.
PPF account holders must submit their PPF passbook along with the application form.
Partial withdrawal will be allowed only after the bank or post office, wherever the PPF account was opened, verifies all details.
The maximum amount that can be withdrawn per financial as partial withdrawals year will be the lower of the following:
50 percent of the account balance as at the end of the financial year (preceding the current year)
50 percent of the account balance as at the end of the fourth financial year (preceding the current year)Step-by-Step process for PPF partial withdrawal
Download the Form C from your bank’s website online or get it from the bank/post office
Fill Form C. The three sections in the Form C are as follows:
Declaration section: Details like PPF account number, the amount of money to be withdrawn, number of years the account has been active have to be provided in this section.
Office-use section: Details like date of account opening, current total balance, date of previous withdrawal (if any), total withdrawal made from the account, etc, have to be provided in this section.
Bank details section: Details like bank account number and other required details of the account in which the withdrawn amount should be credited have to be provided. You need to mention if the amount is to be sanctioned as demand draft, cheque or credited to savings account.
Enclose a copy of your PPF passbook along with Form C.
Submit the same at your respective bank branch or online.The application will be processed, and upon verification the withdrawal amount will be sanctioned at the earliest in a demand draft or into your savings account as per the choice mentioned in the Form C.
(Edited by : Shoma Bhattacharjee)
First Published: Apr 22, 2022 5:26 PM IST
