PPF Withdrawal Update: By depositing money in PPF, you can avail the benefit of tax exemption along with better returns. You can avail tax exemption under Section 80C of Income Tax. After operating the PPF account for three years, you can also take a loan on it.
Employed people invest in many types of saving schemes to make their future financially secure. One of these is Public Provident Fund. It is counted among the popular small schemes of the country. In common parlance it is called PPF. In this government scheme, you can invest at least Rs 500 annually and the maximum investment amount is Rs 1.5 lakh. At present the government is giving interest at the rate of 7.1 percent per annum on PPF. PPF has a locking period of 15 years. But you can withdraw money from PPF even before 15 years during any emergency.
Who can invest in PPF?
You can open PPF account in almost all government and private banks of the country including post office. For this it is necessary to be an Indian citizen. PPF account can be opened in the name of minor children. But for this it is necessary to have a guardian. The earnings from the child’s account are added to the parent’s income.
Permission to withdraw money from PPF account is given 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 maturity of PPF account.
How much amount can be withdrawn?
Partial withdrawal from PPF account can be made only after seven years. You can withdraw 50 percent amount from the account. But you can withdraw money only once in a year. The amount withdrawn will come under the purview of income tax. Under this, 50 percent of the existing amount in the account at the end of the financial year before the current year or 50 percent of the existing amount in the account at the end of the fourth financial year before the current year can be withdrawn.
This work will have to be done for withdrawal
To withdraw money from PPF account, you will have to submit Form C. This will be available in 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 will have to be submitted along with the passbook. After completion of the process the amount will be transferred to your account.
PPF is a better option for long term investment. After operating the PPF account for three years, you can take a loan on it. Loan facility is available from 3rd to 6th year of account opening.
