PPF Account Rules after Maturity

PPF account which is also known as Public Provident Fund is one of the most common and favourite instrument for retirement planning amongst Indians as it can be opened by any individual whether salaried or self employed. PPF account rules provides investors guaranteed return (for a particular financial year) along with interest income which is tax free with certain limitations to PPF withdrawal rules.

Lots of us have been investing in PPF account from some years so as to generate a huge corpus at the time of retirement and also for getting PPF tax deduction under Section 80C. But none of us wondered as to what are PPF rules after maturity. This article will primarily focus on later stages of a PPF account rules but before that let`s first categorize PPF into some important stages

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Important Stages of PPF Account

Stage  I -     After which first loan can be disbursed (Form A is required)

Stage II-    After which first withdrawal can be made

Stage III- Maturity of PPF Account

Stage IV-  Extension for first block of 5 years (PPF Form H is required)

Stage V-    Extension for second block of 5 years

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You must be thinking why the graph is not terminated at 15th year and instead it shows its life till 25th year. Well the answer to this question is that life of a PPF account does not get over as soon as it completes 15 years, rather its has no fixed life. Many people are in an impression that life of a PPF account is only till 15 years from the date of account opening. However PPF account does not get over after completion of 15 years. After maturity of 15 years, PPF can be further extended for a block of 5 years infinitely.

The above graph shows extension for only 2 blocks as people also have assumptions that maximum upto 2 blocks of extensions are permissible which is not true. The PPF account can be extended in blocks of 5 years for an indefinite period as per the instructions from account holder.

Example:- If a PPF account matured in March 2012, it can be further extended for a period of 5 years which means new maturity date will be March 2017. Further if the account holder wishes, account can be extended for another block of 5 years and this can continue.

PPF Rules After 15 Years

Let`s understand various kinds of extensions. There are 2 options which are available with an account holder for extension of PPF account where you have a PPF account in SBI or with any other bank

1)  Without further subscription:- This is a kind of extension which does not require any further subscription to this account. The account holder has the option of getting tax free interest for further period after maturity of 15 years. This option is the by default option which gets activated on its own after the maturity of PPF account , if the account holder does not select the second option. The account holder does not make any further contributions to the account and the account still earns tax free interest for the account holder.

Note:-Once an account holder chooses to continue without subscription for any year, he cannot change his option to with subscription.

2)  With Further Subscription:- Under this option, the account holder gets the option of continuing his public provident fund account with fresh deposits in a way similar as it was maintained previously. In order to avail this option account holder must visit the bank branch and fill up the specific form (form H) and that too within 1 year from the maturity of the account. As per the PPF rules, you can also the account holder can withdraw maximum 60 percent of the amount which was at the beginning of each extended period in one or more instalments but maximum one in a year. The maximum amount that can be withdrawn totally in 5 years is 60% of the amount at the beginning.

Example:-Mr. Arun`s SBI PPF account got matured in march-2010 with the balance of Rs.10 lakhs. He subscribed for another block of 5 years then the total amount that can be withdrawn during the block of 5 years (2010-2015) is Rs.6 lakhs.

In case you want to continue your PPF account after 15 years of maturity, you need to fill up Form H for this purpose

PPF Withdrawal Rules Differentiation

1)  Under first option that is without subscription there is no limitation for the maximum amount withdrawn per year during the block of 5 years or totally in 5 years but in case of with subscription option account holder can withdraw maximum of 60% percent amount only.

2)  A person can keep investing in his PPF scheme with bank like SBI PPF account even after the maturity in case of second option

But in case of first option that is without subscription there is no fresh investment and the original amounts keeps earning interest

You need to have PPF withdrawal form C for withdrawing money from your PPF

Conclusion

PPF rules states that it does not get mature after the time duration of 15 years from the year Public Provident fund account was opened. This account has a life even after expiry of 15 years. An investor can continue the account for further period with subscription or can even continue the account without subscription but you are bind by certain PPF withdrawal rules

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Comments

  1. Gopal says

    I opened a PPF a/c in June 1998. So far no action taken by me. And no deposits in 2012-13 also. My queries are as below:
    1. When is this account maturing as per 15 years completion? June 2013 or April 2013 or April 2014.
    2. If I want to continue without further subscription for another 5 years, how many times can I choose this option for extension for 5 more years?
    3. Once extended without further subscriptions, if I withdraw say 50% of the amount during the first extended year, is that amount / interest earned taxable?
    Thanks for your reply in anticipation.

  2. says

    Hi!
    Wish you all a bright & prosperous New Year 2014.
    My query is:-
    My PPF A/c is with Central Bank of India. The A/c matured on 23/08/2013.
    I was unable to close the said A/c due to unavoidable force of circumstances.
    I would like to close the said A/c today, 9th January, 2014.
    In view of the 5 months maturity lapse period, am I entitled to the interest earned for the said 5 months period ??
    Appreciate your expertise advice??
    Thanks & regards
    Vincent S. D’Souza

  3. Vincent S. D'Souza says

    Hi! Wish you all a bright and prosperous New Year, 2014.
    My query: My PPF made thru Central Bank of India, matured on 23/08/2013.
    I was unable to close the PPF A/c. due to unavoidable circumstances. I wish to close the said PPF A/c with immediate effect.
    In view of the maturity date having expired 5 months ago, will I be paid interest earned for the said period??
    Appreciate your expertise advice.
    Thanks and regards
    Vince

  4. MUTHUKRISHNAN says

    I have a PPF A/c. opened on 05.12.1998 and the 15 year period ended on 5.12.2013. The PPF rules say that the account can be closed on expiry of 15 year period from the end of the year in which the initial deposit was made. If that is the case, the PPF a/c. can be closed on or after 1.4.2014. The Post Office officials say that the account can be closed on or after 1.4.2015 only. Please clarify when can I get the maturity proceeds? Also, if I want to extend the PPF account by another 5 year, when can I withdraw upto 60% — whether on or after 5.12.2013 or 1.4.2014 ? The last subscription was made in Feb. 2013 for the FY 2012-13. Should I make further subscriptions during 2013-14, when I have the intention of closing the account ?

  5. Animesh Shil says

    i opened a ppf account in allahabad bank in 2013.my question is if I complete 15 th year then how can I get pension?
    I also deposit 500 ruppes pm. Total amount will be done 90,000 rs.pls tell me how much I get pension pm?after 15 th year.

  6. syamal says

    My wife opened a PPF account in SBI in May’2007. SBI officials at kolkata High Court branch told me that she cannot get her first withdrawal till 1st April 2014. Please clarify?

  7. Nine Million Dollars says

    Hi Manjunath

    Yes extension of tenure in ppf without any further contribution is possible in India

  8. g.k.manjunath says

    My ppf accounting will be completing 15 years on July 10, 2014. I want to invest some amount during May and June 2014 and like to extend it after July, 20144 for 5 years without making any contribution so that I can earn some interest without having any tax liability. Is this possible.

    thanks in advance

  9. Nine Million Dollars says

    Hi Pradeep
    Any interest amount earned in PPF is tax exempted and the intereset is calculated on principal investment amount compounded annually

  10. Nine Million Dollars says

    Hi Ashish
    If you withdraw PPF money before mandatory lock in period, you would taxed as per your current income slabs. The lock in is considered to be 15 years in such a case

  11. Ashish says

    dear sir,
    plz clarify, if i (partially) withdraw 100000 in 12th year, will it be taxable?

  12. Nine Million Dollars says

    Hi Vivek

    If you are young, withdraw 50% from PPF now whole amount after 15 years and invest in balanced funds

  13. vivek garg says

    sir should I withdraw whole amount or any part thereof from my PPF account before 15 years, account opened in june 2004

  14. Nine Million Dollars says

    Hi Surendra
    You need to approach the bank officials once again and recheck the procedure.

  15. Nitin Chaudhry says

    My question goes such that the PPF a/c got matured on 31st March 2013 and I am withdrawing the amount suppose in the month of May will it still give me interest for extended 2 months? and the other question is that will there be any TDS on the same if I wish to transfer the matured amount to the SBI savings a/c?

  16. says

    I have opened a PPF account in the Post Office in the name of my son in 1997. Now 15 years have been completed and I want to withdraw the total amount. For information, now my son is 21+ years of age.

    I am informed that the matured amount will be disbursed in my son’s name, since, he is an adult now.

    What are the procedural steps need to be followed for receiving the same ?

    Also, can you give me a link to get the Post Office withdrawal form online for application ?

    Thanks for your help.

  17. surendra jain says

    Sir,
    I opened my ppf account on January 1999 at Bikaner (sbbj bank) and then transfered my ppf account
    at Baran Rajasthan on 12th july 2001 in sbbj bank. When I enquired with bank at baran about the maturity date as per 15years of my ppf account I was told that 15years would be calculated from the date of transfer of my account at baran and not from the date the account was started at bikaner. I am confused kindly guide me

  18. pradeep says

    i want to know about, what is tax deduction on interest part on PPF account and how they calculate its on total amoun or interest amout.
    kindly explain the things.

  19. imran pasha says

    if we have paid EPF amounts every month of Rs 500/- for 5 year what amount of lumsum we get

  20. Nine Million Dollars says

    Hi Nirakar
    In such a case, this is considered as “PPF extended without further contribution” if no action is taken for one year. You can withdraw any amount and remaining amount shall keep on getting interest rate

  21. Aalok says

    Dear Sir,
    Kindly clarify, if my PPF Account is completing 15 years on 5-Apr-2013 then amount deposited on 30-Feb-2012 [for tax saving] can also be withdrawn on the maturity or not.

  22. Nirakar Biswal says

    After maturity PPF AC i.e. after maturity15 yrs , if no further subsn is made , and matured amt not withdrawn ,still it continues to earn interest at ppl rate . Pls inform if it holds good at present .

  23. jaiprakash says

    sir, KINDLY GIVE YOUR CLARIFICATION IN CASE OF HUF WHERE DEPOSIT AMOUNT IS ACCEPTED &INTREST IS CREDITED EVERY YEAR,.NOW HOW BANKER CAN REFUSE TO GIVE INTREST FOR PERIOD FOR WHICH DOPOSIT WAS LYING IN SAID A./C.
    KINDLY GIVE YOUR OPINION

  24. Nine Million Dollars says

    Hi Jaiprakash
    In case of Individual it becomes a default option where your PPF account is automatically renewed after 15 yrs. And you keep on getting interest on it. That is “PPF extension without any further additions”

    I am not sure about HUF Case

    Nine Million Dollars

  25. jaiprakash says

    sir, kindly let me know the status of intrest after maturity in huf ppf a/c.the banker says you will get intrest upto 31-3-11,what about intrest for 2011-12 &2012-13.KINDLY GIVE CLARIFICATION ALONG WITH COPY OF CIRCULAR IF ANY

  26. Nine Million Dollars says

    At the end of your tenure, normally a cheque in favour of the PPF account owner is issued. The withdrawal forma are available at all post office branches across India

  27. says

    In my view PPF is one of the most complex products with a long lock-in period. Most people invest thinking they dont require money for long, but emergencies or cash flow needs can arise anytime. This works only for people who are affluent enough to take care of their needs for atleast the next 5-7 yrs. If not PPF has to be avoided.
    These are my personal views because I feel its not a good idea to invest merely for tax free returns. There are other better avenues to build wealth over long term.

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