PPF Withdrawal Rules: Partial, Loan & Maturity

The Public Provident Fund (PPF) has a 15-year lock-in, but you're not entirely locked out of your money. PPF offers partial withdrawal from the 7th year and a loan facility between years 3-6. Here's the complete guide.

PPF Withdrawal Options at a Glance

Partial Withdrawal Rules (From 7th Year)

When Can You Withdraw?

You can make a partial withdrawal from your PPF account starting from the 7th financial year from the date of account opening.

Example: If you opened your PPF account in FY 2020-21, you can make your first partial withdrawal from FY 2026-27 onwards.

How Much Can You Withdraw?

The maximum partial withdrawal amount is the lower of:

• 50% of the balance at the end of the 4th preceding financial year, OR
• 50% of the balance at the end of the preceding financial year

Example: If withdrawing in FY 2026-27:

• 50% of balance as on 31 March 2023 (4th preceding year), OR
• 50% of balance as on 31 March 2026 (preceding year)
• Whichever is lower

Key Rules

1. One withdrawal per financial year is allowed
2. Withdrawal amount is completely tax-free
3. No reason required — unlike some schemes, PPF partial withdrawal doesn't need purpose documentation
4. The withdrawn amount cannot be redeposited back into the PPF account (it doesn't increase the ₹1.5 lakh annual limit)
5. Withdrawal does not affect the maturity period — the account continues for the full 15 years

Form C — Partial Withdrawal Application

To make a partial withdrawal, submit Form C at your bank or post office with:

• PPF passbook
• Identity proof
• Bank account details for fund transfer

Loan Facility (Years 3-6)

PPF offers a loan facility as an alternative to withdrawal in the early years.

When Available?

Loans can be taken from the 3rd financial year to the 6th financial year from the date of account opening.

Loan Amount

• Maximum 25% of the balance at the end of the 2nd preceding financial year

Example: If taking a loan in FY 2023-24 (3rd year for an account opened in FY 2020-21):

• Maximum = 25% of balance as on 31 March 2022

Interest Rate on PPF Loan

• 1% above the prevailing PPF interest rate
• Current PPF rate: 7.1%, so loan interest = 8.1%
• Interest is charged for the period from the loan date to repayment

Loan Repayment Rules

1. Loan must be repaid within 36 months (3 years)
2. Repayment is in maximum 2 instalments or lump sum
3. Principal is repaid first, then interest in a second instalment
4. If not repaid within 36 months, the outstanding amount is treated as withdrawal, and interest is charged at 6% per annum (instead of 1% above PPF rate)

Form D — Loan Application

Submit Form D at your bank or post office with:

• PPF passbook
• Loan application form

Maturity Withdrawal (After 15 Years)

When Does PPF Mature?

PPF matures at the end of 15 financial years from the year of account opening.

Example: Account opened in FY 2010-11 → Matures on 31 March 2026

Maturity Process

1. Submit Form C (withdrawal form) at your bank or post office
2. Provide PPF passbook and identity proof
3. The entire balance including accumulated interest is paid out
4. The amount is completely tax-free
5. The account is closed after final settlement

Maturity Extension (5-Year Blocks)

At maturity, you can extend the PPF account in blocks of 5 years:

Option 1: Extension With Contributions

• Submit Form H within 1 year of maturity
• Continue making deposits (₹500 to ₹1.5 lakh per year)
• Enjoy continued tax benefits under Section 80C
• Partial withdrawal allowed: up to 60% of balance at the start of each extended block
• One withdrawal per financial year

Option 2: Extension Without Contributions

• If you don't submit Form H, the account is automatically extended without contributions
• No further deposits allowed
• The balance continues to earn interest at the prevailing PPF rate
• One withdrawal per year allowed without any percentage limit
• No Section 80C benefit since no deposits are made

Premature Closure (After 5 Years)

PPF allows premature closure after 5 years from account opening under specific conditions:

Allowed Reasons

1. Higher education of the account holder or dependent children
2. Serious illness of the account holder, spouse, children, or parents
3. Change of residency (NRI status) — account must be closed

Interest Deduction

• On premature closure, the interest rate is reduced by 1% from the applicable rate for the entire duration
• Example: If PPF rate was 7.1%, you receive interest at 6.1% for all years

Documents Required

• Application for premature closure
• Supporting documents (medical reports, admission letter, or NRI proof)
• PPF passbook
• Identity and address proof

Summary of PPF Forms

Important Tips

1. Use Loans Wisely: PPF loans at 8.1% are cheaper than personal loans — use them between years 3-6 if needed
2. Withdraw Strategically: Time your partial withdrawals to minimize impact on compounding
3. Extend at Maturity: If you don't need the money, extend with contributions for continued 80C benefits
4. Form H Deadline: Submit Form H within 1 year of maturity — missing this means extension without contributions only
5. Keep Records: Maintain copies of all withdrawal forms and passbook entries

Frequently Asked Questions

Can I withdraw from PPF before 7 years?

No, partial withdrawal is not available before the 7th financial year. However, you can take a loan against your PPF balance from the 3rd to 6th year.

Is PPF partial withdrawal taxable?

No, PPF partial withdrawals are completely tax-free. PPF enjoys EEE (Exempt-Exempt-Exempt) status.

How many times can I withdraw from PPF in a year?

You can make one partial withdrawal per financial year from the 7th year onwards.

Can I close my PPF account before 15 years?

Yes, but only after 5 years and for specific reasons (education, serious illness, or NRI status). A 1% interest penalty is deducted on premature closure.

What happens to my PPF if I don't withdraw at maturity?

The account is automatically extended without contributions. Your balance continues to earn interest, and you can make one withdrawal per year. To extend with contributions, submit Form H within 1 year of maturity.

Can I take a PPF loan and partial withdrawal simultaneously?

No. The loan facility is available only in years 3-6, while partial withdrawal starts from year 7. A second loan cannot be taken until the first loan is fully repaid.

This guide is for informational purposes only. CitizenNest is not affiliated with the Government of India. For official details, visit the India Post PPF page. Also see our PPF account opening guide and PPF transfer guide.