PPF gives tax exemption underneath part 80C of the Revenue Tax Act, and its returns usually are not taxable, making it a superior funding possibility in comparison with many others.Furthermore, you may go for a Mortgage Towards PPF, which gives loans in opposition to your PPF steadiness at a aggressive rate of interest throughout monetary emergencies.
Whereas your PPF account is lively, you’ve got the flexibleness to borrow cash in opposition to it or make partial withdrawals, regardless of its 15-year lock-in interval. Nevertheless, as soon as it reaches maturity, what choices can be found?
You might have three options to proceed as soon as your PPF account matures,
a) Shut the account and withdraw the complete proceeds.
b) Prolong the account with out making recent deposits.
c) Prolong the account with recent deposits.
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1. Shut the account and withdraw complete proceeds
You may solely shut a PPF account after 15 years from the tip of the yr by which you first subscribed to it. As soon as your account matures, you may withdraw the complete corpus.
To do that, it’s good to submit a completely stuffed Type C on the financial institution department or put up workplace the place your PPF account is held. After processing, the corpus will probably be credited to your checking account, and the PPF account will probably be closed. In some banks, Type 2 is used as an alternative of Type C.
2. Prolong the account with out recent deposits
After your PPF account matures, you’ve got the choice to increase it in five-year intervals indefinitely. Throughout this prolonged interval, you are not required to make new deposits, however you may nonetheless make partial withdrawals, topic to sure circumstances. Nevertheless, extra contributions will not be accepted. The steadiness will proceed to earn curiosity for the following 5 years. You are allowed to make one partial withdrawal per fiscal yr throughout this time. Any quantity within the steadiness could be withdrawn as soon as per fiscal yr by the subscriber. It is necessary to notice that when you proceed the account with out deposits for greater than a yr, you can not decide to renew contributions for a subsequent five-year block.
3. Prolong the account with recent deposits
To proceed utilizing your PPF account and make new contributions after the tip of the maturity interval, it’s essential to notify the Account Workplace earlier than the yr ends by finishing Type H. When you proceed to deposit with out submitting this way, any additional deposits will probably be thought-about irregular, and no curiosity will probably be paid on them. Moreover, deposits made into PPF accounts after the 15-year window with out selecting to maintain the account open is not going to qualify for the tax advantages supplied by Part 80C of the Revenue Tax Act.
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Partial withdrawals throughout extension interval
When you select to increase your PPF account with out contributing, you may withdraw any quantity out of your steadiness as soon as per fiscal yr, whereas nonetheless incomes curiosity on the remaining steadiness.
Alternatively, when you determine to increase the account with a contribution, you are allowed just one partial withdrawal throughout the extension interval. To do that, it’s good to submit a Type C utility. Nevertheless, there is a situation: the full withdrawals made throughout the five-year block interval can’t exceed 60% of the credit score steadiness in the beginning of the prolonged interval.
You might have flexibility in the way you withdraw this quantity—you may take it unexpectedly in a single yr or unfold it out over a number of years to fit your wants. Equally, throughout the subsequent five-year block interval, you may withdraw as much as 60% of the full quantity at credit score in the beginning of that interval, however not more than as soon as per yr. This withdrawal restrict applies initially of every five-year block extension.
 offers tax benefits, competitive interest rates, and flexible options upon maturity. You can choose to close the account,){kind=link}