PPF withdrawal rules before maturity is something still majority of the ppf account holders are unaware of. In this post we will review PPF Withdrawal Rules Before Maturity and also clarify doubts in case a user gets at the comments section.
PPF has been one of the best tax savings instrument till date since 1968. This is a long time investment with greater benefits like Tax Free Investment and Tax Free Withdrawals and Tax Free Interest earned from this scheme. It is popularly called as EEE – Exempt from Investment, Exempt from Interest Earned and Exempt from Withdrawal. Since ppf withdrawal is exempt, its also essential for a ppf account holder to know some of the important withdrawal rules before maturity of the account.
Note : PPF Withdrawal Rules in Post Office or any Banks are the same.
PPF Withdrawal Rules Before Maturity
Rule 1: PPF Withdrawal in terms of loan can be made only after the completion of 3 years and the 4th year a loan on the balance amount can be withdrawn which around 25% of the amount.
Rule 2: PPF Withdrawal followed in rule 1 needs to be re-payed back to the bank since its a loan, this repayment should be done in 36 months max and even less. The re-payment has certain rules and regulations, when followed, the user can avoid interest on the same
Rule 3: PPF Withdrawal can be made from the 7th year till the end of PPF Account closing. This again is at the balance of the previous 3rd year at the time of withdrawal. This amount does not attract tax. The PPF SBI Rules are the same as above.
Further, PPF Withdrawal Procedure is against the submission of the Form C – PPF Withdrawal Form. The PPF Interest Rate will not change after the withdrawal of the amount from the bank but the interest will be offered based on the balance of the amount present in your ppf account. Since a large number of banks now offer PPF Account, the PPF Rules in India are the same across all banks.