If you need money suddenly, then you can withdraw money from PPF. However, there are some rules to this. Let us know that you can withdraw money from PPF account before maturity.
PPF Withdrawal Rule: Investment in Public Provident Fund ie PPF is a very popular saving scheme among people nowadays. In this, the customer can make a safe investment without any risk. This scheme is tax free, as the tax exemption and maximum investment are equal. You can invest at least Rs 500 annually in this government scheme, and you can save up to a maximum of Rs 1.5 lakh.
At present, the government is giving 7.1% rate of interest annually on PPF. You can get good returns by investing in this scheme. You can open PPF account in any bank and post office of the country.
Explain that by investing in PPF, you get interest on compounding, which is calculated on an annual basis. You can open PPF account in almost all government and private banks of the country including post office. The eligibility for this is to be Indian only.
But, if suddenly you need money, then you can withdraw money from PPF. However, there are some rules to this. Let us know that you can withdraw money from PPF account before maturity.
Can withdraw before time
- PPF has a locking period of 15 years. So if you want to invest for the long term, then PPF is a great option.
- If you need money in between, then you can withdraw some amount from this scheme.
- If you want to withdraw money before 15 years, then it is allowed only after seven years.
- While investing in this scheme, also keep in mind that the year of starting investment is not counted in the calculation of 15 years in maturity of PPF account.
- You can do partial withdrawal from PPF account after seven years.
- You can withdraw 50 percent of the amount from the account. But you can withdraw money only once in a year and the withdrawn income will come under the ambit of tax.
- 50% of the balance in the account at the end of the financial year preceding the current year or 50% of the balance in the account at the end of the fourth financial year preceding the current year can be withdrawn.
Withdrawal Process
- To withdraw money from PPF account, you have to submit Form C. This will be available in the bank or post office.
- In the form, you will have to mention your account number and the amount you want to withdraw.
- Apart from this, a revenue stamp will also be required.
- Then it has to be submitted along with the passbook.
- After the process is complete, the amount will be transferred to your account.
You get these benefits
- After operating the PPF account for three years, you can take a loan on it.
- Loan facility is available from 3rd year to 6th year of account opening.
- You can apply for the second loan only after the first loan is closed.
- Only 25% of the amount deposited on PPF account can be taken as loan.
- By depositing money in PPF, along with better returns, you can also take advantage of tax exemption.
- You can take advantage of tax exemption under section 80C of income tax, which has a maximum limit of Rs 1.5 lakh.
