Indian Railways plans linking of these documents for booking tickets on IRCTC

PPF partial withdrawal, premature closure rules explained


I had opened a PPF accounts in January 2012. My daughter is pursuing her MD abroad for which I may need funds. Can I close my PPF account prematurely? Or alternatively can I withdraw money from my PPF account and if yes then what percentage of money can be withdrawn? What is the procedure for the same? Can I open a new PPF account after closing the existing PPF account? -Dr Chimanlal Prabhudas Jikadara

Yes. You have both the options in the given circumstances. You can withdraw money from your PPF account any time after completion of five complete financial years meaning you can withdraw money in the seventh running year of the account. For this purpose, you will have to approach the bank/post office where the account is opened and submit Form-2.

The amount which you can withdraw from your PPF account shall be restricted to higher of fifty per cent of the balance standing at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year. So in your case you will be able to withdraw higher of 50% of either the balance outstanding on 31-03-2021 or the balance as on 31-03-2018.

Premature closure of PPF account is allowed in specified situations like for treatment of life threatening disease of the account holder/ spouse or dependent children or parents or for higher education of the account holder, or dependent children. One can also close the PPF account prematurely on change of residence to another country.

Also Read: NRIs can continue investing in PPF account

The facility to prematurely the PPF account is available after completing of full five financial years means during 7th year of its opening or afterwards. So you can close the account to fund the education of your daughter who is dependent on you. Please note that in case you opt for prematurely closure of your PPF account a penal interest of one percent will be deducted from the rate at which the interest was credited in the past. Since a person is not allowed to have more than one PPF account at a time, there should not be any problem for you in opening another PPF account after you have closed your existing one.

Balwant Jain is a tax and investment expert and can be reached at

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