PPF Rules: If a person starts investing in PPF and needs money before the completion of 15 years, can he withdraw money from the PPF scheme? Or if a person wants to close the PPF account before 15 years, is this facility given to him?
PPF Rules: Public Provident Fund i.e. PPF is a government guaranteed scheme. Any Indian citizen can invest in this scheme. PPF is a long term scheme, on which interest is currently being given at the rate of 7.1 percent. This scheme with EEE category saves tax in three ways along with adding a good amount in the long run. But if a person starts investing in PPF and needs money before the completion of 15 years, can he withdraw money from the PPF scheme? Or if a person wants to close the PPF account before 15 years, is this facility given to him? If you are also an investor of PPF or are thinking of investing in it, then you must be aware of this rule.
Partial withdrawal can be done from the sixth year
If you need to withdraw money from PPF before 15 years, then you can make a partial withdrawal from the account. Partial withdrawal facility can be available from the sixth financial year. For example, if you opened the account on February 1, 2020, then you will get the withdrawal facility from the financial year 2025-26. In such a situation, you can make partial withdrawal up to 50 percent.
Account can be closed before 15 years in these situations
If you need to close the account midway after investing in PPF, then for this your account should be at least 5 years old. Meaning you can get this facility only after 5 years. If you withdraw before the account matures, you will get your money back after deducting 1% interest. Apart from this, premature closure can also be done only in special circumstances like-
1- If there is a medical emergency and you need money for your or your family member’s treatment, then you can make a partial withdrawal after 5 years or you can also get premature closure done.
2- For the higher education of children, PPF can be closed prematurely after 5 years or partial withdrawal can be done.
3- If you are shifting abroad, then also you can close the PPF account and withdraw the entire money.
4- In case of death of the account holder, the account can be closed before maturity. In this situation, the 5-year rule does not apply.
This is the method of pre-mature closure
To close the PPF account pre-maturely, you have to submit a written application to the home branch of the bank account. In this application, you have to tell the reason why you are closing the account. Meanwhile, you also have to attach some documents with the application. It should have a copy of the PPF passbook.
Also, if you are closing the account for treatment of illness, then the documents given by the medical authority, if you are closing the account for higher education, then the fee receipt, book bills and documents confirming admission and in case of death, the death certificate has to be attached. After verification of the documents, the application to close the account is accepted. After this, your account is closed but the penalty amount is deducted.
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