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Here Are 5 Rules You Need To Know About Ppf Withdrawal

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By Author: Neha Sharma
Total Articles: 170
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"PPF or Public Provident Fund is one of the most popular tax saving investments in the country. Investments made in PPF are deductible under Section 80C of the Income Tax Act. The interest earned on PPF account is exempt from tax. The minimum contribution under this is Rs. 1,000 whereas the maximum is Rs. 1,50,000.

Investments made in PPF have a lock in period of 15 years. After the end of 15 years, it can be extended in blocks of 5 years at a time. The amount lying in the balance of the PPF account can be withdrawn at the end of the first lock in period of 15 years. It is also possible to withdraw prematurely from the PPF account, subject to certain rules.

Here are 5 rules you need to know about PPF withdrawals:

1. Maximum withdrawal permitted:
The maximum withdrawal permitted from PPF is 50% of the lower of:

• Accumulated balance at the end of fourth year immediately preceeding the year of withdrawal
• Accumulated balance at the end of the year immediately preceeding the year of withdrawal

50% of the lower of these two figures is allowed to be withdrawn from the PPF account. ...
... To make this withdrawal the PPF account holder needs to fill Form-C and submit it to the bank in which the PPF account is held.

2. Year of withdrawal:
A PPF account holder is allowed to make withdrawals starting from the 7th year from the year of account opening. For example, if the account was opened in 2009-2010, then the account holder can make his first withdrawal in the year 2017.

3. Number of withdrawals:
The withdrawal from PPF is capped at one withdrawal per year. This withdrawal is tax free, i.e it is not charged to tax.

4. Withdrawal after account extension:
Once the PPF account has matured, it can be extended in blocks of 5 years at a time. If the account is extended without any contributions, the amount standing to the credit of the account when it matured can be withdrawn. However, this withdrawal can be done only once in a financial year.

If the account is extended and further contributions are made, the account holder can withdraw up to 60% of the balance standing to the credit of the account when it matured. This withdrawal is also capped at once every financial year.

5. Withdrawal after maturity:
When the PPF account matures after 15 years, the entire amount standing to the credit of the account can be withdrawn. This entire amount is tax free.


Author Bio:- Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about PPF account. Through her work, she explains rules for PPF withdrawal

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