Everything you need to know about withdrawing money from your PPF account. Partial withdrawal, loans, premature closure, and extension rules — all explained.
The Public Provident Fund has a mandatory lock-in period of 15 financial years from the end of the financial year in which the first deposit was made. This means if you open a PPF account and make your first deposit in July 2024 (FY 2024-25), the account matures at the end of FY 2039-40, that is on March 31, 2040.
During this 15-year period, you cannot withdraw the entire balance. However, you are not completely locked in — PPF rules allow partial withdrawals from the 7th financial year and loans from the 3rd to 6th financial year. Understanding these provisions helps you plan your liquidity needs without closing your PPF account.
You become eligible for partial withdrawal from your PPF account starting from the 7th financial year of account opening. The amount you can withdraw is limited by a specific formula set by the government.
Maximum withdrawal allowed = 50% of the balance at the end of the 4th preceding financial year OR 50% of the balance at the end of the immediately preceding financial year, whichever is lower.
For example, if you want to make a partial withdrawal in FY 2030-31 (your 7th year), you can withdraw up to 50% of the balance as on March 31, 2027 (end of the 4th preceding year) or 50% of the balance as on March 31, 2030 (end of the preceding year) — whichever is lower.
Suppose your PPF balance at the end of Year 4 (the 4th preceding year) was Rs 3,50,000 and your balance at the end of Year 6 (the immediately preceding year) was Rs 6,00,000. Your maximum partial withdrawal would be:
Key rules for partial withdrawal: Only one partial withdrawal is allowed per financial year. The withdrawal is completely tax-free. You need to submit Form C at your bank or post office to request a partial withdrawal. No reason needs to be provided for the withdrawal.
From the 3rd financial year to the 6th financial year of your PPF account, you can take a loan against your PPF balance. This is different from a partial withdrawal — you borrow against your own balance and must repay with interest.
Note: The loan facility against PPF is generally not recommended because you are paying 8.1% interest to borrow your own money that is only earning 7.1%. If you need liquidity, waiting until Year 7 for a tax-free partial withdrawal is a better option financially.
Premature closure (withdrawing the entire balance before 15 years) was not allowed until recently. The government now permits premature closure of PPF under specific conditions, but with a penalty.
The 1% penalty on premature closure can be significant. On a PPF account with Rs 15 lakh balance after 10 years, the penalty could mean losing Rs 80,000 to Rs 1,00,000 in interest. Always consider partial withdrawal or loan options before resorting to premature closure.
After the 15-year maturity, you have three options for your PPF account:
Withdraw the entire balance. The maturity amount (principal + interest) is completely tax-free under EEE status. Submit Form C to your bank or post office. You can continue using the PPF account's remaining balance even after partial maturity withdrawal.
Continue the PPF account in 5-year blocks without making any new deposits. Your existing balance continues to earn interest at the prevailing PPF rate. You can make one withdrawal per year of any amount up to the full balance. This option is ideal if you want to earn tax-free interest on your accumulated corpus without adding more money.
Extend the PPF account in 5-year blocks and continue depositing up to Rs 1,50,000 per year. Deposits continue to qualify for Section 80C deduction. One partial withdrawal is allowed per year, limited to 60% of the balance at the start of each extension block. Submit Form H within 1 year of maturity to opt for this extension.
Important: If you do not submit any form or make any withdrawal within 1 year of maturity, the account is automatically extended without fresh contributions. You can still withdraw freely but will not be able to switch to the 'with contributions' option later.
Use our free PPF calculator to see how your investments grow with guaranteed 7.1% tax-free returns.
Calculate PPF Maturity →Partial withdrawal is allowed from the 7th financial year onward, up to 50% of the balance at the end of the 4th preceding year. Before that, from Year 3 to Year 6, you can only take a loan (up to 25% of balance). Premature full closure is allowed only after 5 years for medical emergencies or higher education, with a 1% interest penalty.
Yes, all withdrawals from PPF are completely tax-free — both partial withdrawals during the term and the full maturity withdrawal. PPF has EEE (Exempt-Exempt-Exempt) status under the Income Tax Act, meaning the deposits, interest earned, and withdrawals are all exempt from tax. This makes PPF one of the most tax-efficient investments in India.
During the active PPF tenure (before maturity), you can make only one partial withdrawal per financial year from the 7th year onward. After maturity, if you extend without contributions, you can make one withdrawal per year of any amount. If you extend with contributions, one partial withdrawal per year up to 60% of the opening balance of the 5-year block is allowed.
If you do not submit any extension form or withdrawal request within 1 year of maturity, the account is automatically extended in 5-year blocks without fresh contributions. Your balance continues to earn interest at the prevailing PPF rate. You can make withdrawals at any time, but you lose the option to make fresh deposits and claim 80C deductions.
Yes, premature closure of PPF is allowed for higher education of the account holder or dependent children, but only after completion of 5 financial years. You need to provide admission letter and fee structure from the educational institution. A 1% penalty on interest rate applies for the entire tenure. For minors' PPF accounts, premature closure is allowed only for the child's education or medical treatment.