Published On: Wed, Apr 18th, 2018

How Much Withdraw from PPF One Time?


The Public Provident Fund also known as the PPF is one of the most popular terms used in the financial markets today. In case you want to withdraw money from your Public Provident Fund
account, this is the article that you should be reading today.

The Public Provident Fund Scheme has been very strict about its withdrawal rules. Hence that rules turn out to be one of the limiting factors about the Public Provident Fund. In this article we will talk about the limits of withdrawals and how that will affect you.

If you are facing any emergency scenario, you are allowed to withdraw money starting from the 7th financial year till the 15th financial year. However in order to do so, there are rules that you will have to abide by.

A Public Provident Fund is a savings account for long term purposes and is also a source of good tax free return on investment. A Public Provident Fund or a PPF account matures after 15 years. Just in case you would like to carry on with your account after the maturity period, then you can very well block it for another 5 years.

It is very important to note that every financial year begins from the 1st of April till the 31st of March of the next year. Let’s talk about the withdrawal process below.

Old PPF Account Rules:

A person can withdraw money from his account from the 7th financial year onwards. If you use a PPF calculator which is available on several places online, you will be able to check your withdrawal amount. The amount that is obtained by calculating by the basis of the interest applied is the only amount that you can withdraw from your account. Let’s state an example:  If you are starting your PPF account on the 1st of April 2016 then you will be able to start withdrawing your money from the PPF account in the year 2022. This is because 2022 is the seventh financial year.

New PPF Account Rules:

The new PPF account rules have brought about some positive changes. Therefore the withdrawal process is not as still as it used to be before. Here are a few things you should know:

  • There are no changes as far the partial amount withdrawals from the account is concerned. The rules stay the same.
  • According to the new rules you are allowed to close your account by submitting a special application to the fund office. This however is subject to a lot of conditions:

    1) if you require money for treatment of some very serious and life-threatening diseases then you are allowed to go ahead with your application. The patient should be a PPF subscriber a spouse or any dependent member of the family. In order to take this step, you must provide sufficient evidence that your claim is justified. Thus, you would need to ask your hospital to provide medical certificates that would prove that the patient is currently suffering a very serious disease and is suffering because of it. Only when these documents have been verified by an MD doctor, you will be able to go through with your claim.

 

2) In case you would require money in order to support your children’s future higher education plans, you can avail the option of premature withdrawal. There are a few conditions though. Your child must have already secured admission in a recognized university in India or abroad. There are certain documents that need to be presented as proof such as bills, admission letters and other necessary approvals. The Public Provident Funds office will be inspecting your application and finally decide whether to go ahead with your claim for withdrawal or not.

 

  • The premature close of the account can only be permitted when the account has been active for at least a good five financial years.
  • But do not be happy just yet. If you are thinking about a premature closure of the amount, you must be willing to pay the penalty fee which is associate with such premature withdrawals. The new rule states that the penalty fee rate is 1 percent.
  • The one percent fee that you would be paying is not absolute but rather one percent less than the interest rate applicable at that time.

The new rules for the PPF account withdrawals certainly have some good benefits. For anyone who is suffering from a terrible disease or needs money very urgently for their children’s future surely will benefit a great deal from these new laws. There is of course the penalty rate of 1 percent that will put off some people, but in the time of need, that 1 percent penalty will probably not stop you from a withdrawal.

About the Author

-