Since July 2025, one can give out partial withdrawals of a Public Provident Fund (PPF) account after six financial years after the establishment of the account. This allowances one to borrow money to cover other needs, such as education or medical costs and still maintain the account.
Partial Withdrawal Limits
The account holder will be allowed to withdraw the amount of 50% of the balance as at the end of the fourth financial year or the previous year, which is lower. It only allows a single withdrawal per year and that is why the account keeps growing.
Premature Closure Conditions
Cases of premature closure are permitted upon completion of five years due to medical emergency, or higher education. It charges a penalty on interest rate of 1 percent which lowers returns earned in the account opening or extension date.
Full Withdrawal at Maturity
Upon the expiry of the 15 years maturity, the account owners can cash in the full amount of the account, both the principal and tax-free interest. The maturity period begins after the termination of the financial year of the initial deposit.
Extension Withdrawal Rules
After maturity, five years blocks of post-maturity PPF can be funded or non-funded. In cases of extensions where there are contributions, maximum 60 percent of the balance at the time of the extension can be withdrawn but not more than once in a year.
Tax-Free Withdrawals
Section 80C is applicable to all PPF withdrawals (partial, premature and at the maturity) and is tax-exempt. This predisposes PPF as the method of long-term, tax-efficient retirement or other major goal retirement savings.
Support Process Simplified.
To pull out, fill Form C (or Form 2) and hand in your PPF passbook at the bank or at the post office. Since July 27, 2025, the eKYC performed with Aadhaar will allow one to make a withdrawal without paperwork.
PPF Withdrawal Limits
| Withdrawal Type | Eligibility | Limit | Penalty |
|---|---|---|---|
| Partial Withdrawal | After 6 years | 50% of balance (4th year or prior year) | None |
| Premature Closure | After 5 years | Full balance | 1% interest reduction |
| Extension with Contribution | Post 15-year maturity | 60% of balance at extension start | None |
Maximize Your PPF Benefits
Being aware of the 2025 PPF withdrawal regulations assists in creating the balance between the liquidity and long-term savings. Make decisions on withdrawing plans without incurring penalties and maximizing on the amount to be withdrawn as tax free. Visit nsiindia.gov.in for detailed guidelines and updates.
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