The Public Provident Fund (PPF) is one of the most trusted long-term savings schemes in India as it offers tax-free returns and sovereign guarantees. The current rate of interest by the government as of July-September 2025 is 7.1% per annum. The disciplined savings culture instilled by the scheme’s 15-year lock-in period is beneficial, and the flexibility in withdrawals under the revised rules is an added advantage.
Partial Withdrawals after 5 years
Partial withdrawals can be claimed after five financial years of the account being active. The maximum limit of withdrawal is 50% of the balance as of the 4th year preceding the withdrawal year. Additionally, it can be the previous year’s balance of the account, whichever is lower. It must be noted that only one partial withdrawal is allowed per financial year.
Conditions for Early Closure
Under specific conditions like medical emergencies, pursuing higher studies, or moving out of the country, an account can be closed after five years of active use. The penalty in these cases is 1% lower than the credited rate of interest. Mandatory documents supporting the claim like medical documents or admission letters need to be submitted for account closure.
Withdrawal on Maturity and Extension Options
An account holder may withdraw the entire amount after 15 years, including the account’s corpus, without any penalties. Also, the account can be continued in five-year segments with or without new contributions. If continued without new deposits, withdrawals are permitted once a year. If continued with new deposits, 60% of the amount available at the beginning of the extension can be taken over five years.
PPF Withdrawal Pricing Table (2025 Estimates)
| Scenario | Interest Rate | Withdrawal Limit | Tax Implication |
|---|---|---|---|
| Partial Withdrawal (Post 5 yrs) | 7.1% | 50% of eligible balance | Tax-free |
| Premature Closure | 6.1% (penalized) | Full amount (with reason) | Tax-free |
| Maturity Withdrawal | 7.1% | Full corpus | Tax-free |
| Extension with Deposits | 7.1% | 60% over 5 years | Tax-free |
| Extension without Deposits | 7.1% | Once per year | Tax-free |
Final Thoughts
Knowing the latest rules for PPF withdrawal allows investors to plan for liquidity without derailing long-term objectives. The scheme provides a good balance between stability and access with flexible options for partial, premature, and maturity withdrawals. Always keep your account and withdrawal documents up to date to avoid delays.
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