How to withdraw amount from PPF Account ??

Public Provident Fund ( PPF ) was introduced in India in 1968 with the objective to mobilize small savings in the form of investment, coupled with a return on it. It can also be called a savings-cum-tax savings investment vehicle that enables one to build a retirement corpus while saving on annual taxes. Anyone looking for a safe investment option to save taxes and earn guaranteed returns should open a PPF account.

What Is the PPF Account ??

Public Provident Fund(PPF) scheme is a long term investment option that offers an attractive rate of interest and returns on the amount invested. The interest earned and the returns are not taxable under Income Tax. One has to open a PPF account under this scheme and the amount deposited during a year will be claimed under section 80C deductions.

How To Open A PPF Account ??

A PPF account can be opened with either a Post Office or with any nationalized bank like the State Bank of India or Punjab National Bank, etc. These days, even certain private banks like ICICI, HDFC and Axis Bank among others are authorized to provide this facility. You need to submit the duly filled application form along with the required documents i.e. the KYC documents like identity proof, address proof, and signature proof. Post submitting these documents you can deposit a prescribed amount towards the opening of the account.

What Is The Intrest Rate Of PPF Account ??

The current interest rate is 8% (for the quarter October to December 2018 prior to which it was 7.6%) which is compounded annually. The Finance Ministry sets the interest rate every year, which is paid on 31st March. The interest is calculated on the lowest balance between the close of the fifth day and the last day of every month.

How to withdraw the amount from PPF Account ??

• Anytime after the expiry of 5 years from the end of the financial year in which the initial subscription for Public Provident Fund (PPF) Account was made, the subscriber may withdraw 50% of the balance to his credit at the end of 4th year immediately preceding the year of withdrawal or the amount at the end of the preceding year whichever is lower. However, not more than one withdrawal is permitted in one financial year. The application for withdrawal will be made in Form 2.

• A PPF subscriber may withdraw the entire amount standing to his credit after the expiry of 15 years from the end of the financial year in which the initial subscription was made. He/She may, also, opt to continue with the scheme by subscribing for a further block of 5 years by applying to the deposit offices in Form- 4 before the expiry of one year from the maturity of the account.

• A PPF subscriber may also avail of this facility for a further block of 5 years on the expiry of 20 years (or on expiry of 25 years and so on) from the end of the year in which the initial subscription was made. However, if a subscriber continues to deposit after 15 years without submitting Form 4, he shall not be eligible to enjoy benefits under Section 80C of I.T.Act. These deposits will be treated an irregular and will not earn interest.

• During the extended period of 5 years, a PPF subscriber is eligible to make partial withdrawal not exceeding one in every financial year subject to the condition that total withdrawal during the 5 years shall not exceed 60% of the balance to his credit at the commencement of the period.

• Even if the PPF subscriber does not wish to make any further subscription, the balance in his credit shall continue to earn interest.