Complete guide on how to make early PPF withdrawals

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Complete guide on how to make early PPF withdrawals before the 15-year maturity period

When allowed: From the 7th financial year onwards.
Limit: Up to 50% of the balance at the end of the 4th year preceding the withdrawal year, or 50% of the balance at the end of the immediate preceding year — whichever is lower.
Frequency: Only once per financial year.
Form Required: Form C.

When allowed: After completing 5 financial years, only under specific conditions:
- Serious illness of the account holder or dependents.
- Higher education of the account holder or dependents.
- Change in residency status (i.e., becoming an NRI).
Penalty: Interest will be paid 1% less than the applicable interest rate for each year.
Form Required: Form for Premature Closure of PPF Account + proof of reason (e.g., medical or education documents).

When allowed: On maturity, i.e., after completing 15 full financial years from the end of the year the account was opened.
Action: Withdraw full balance without any tax liability.
Option: You may choose to extend the account in blocks of 5 years with or without further contributions.
Tax Status: PPF falls under EEE (Exempt-Exempt-Exempt) category — contributions, interest earned, and maturity proceeds are all tax-free.
NRI Status: NRIs cannot open a new PPF account. If a resident becomes an NRI, the account can be maintained till maturity but cannot be extended.

Eligibility: Allowed after 1 full financial year from the end of the FY in which the account was opened. and Can be availed before the expiry of 5 full FYs.
Loan Amount: Up to 25% of the balance at the end of the 2nd FY preceding the year of loan application.
Example:
- Loan applied on 31 March 2025
- Year to consider: 31 March 2023
- Balance: ₹4.5 lakh
- Max Loan = 25% = ₹1.12 lakh
Repayment Terms:
- Max 36 months
- Interest = PPF rate + 1%

Eligibility: After completion of 5 full financial years from the end of FY in which the account was opened.
Withdrawal Limit: Lower of 50% of Balance at end of 4th FY preceding the year of withdrawal, or Balance at end of FY preceding the year of withdrawal.
Example:
- Withdrawal on 31 March 2025
- Balance on:
  - 31 Mar 2021 (4th FY preceding): INR 4 lakh → 50% = INR 2 lakh
  - 31 Mar 2024 (preceding FY): INR 5 lakh → 50% = INR 2.5 lakh
- Withdrawal allowed = INR 2 lakh (lower of the two)

Feature	Loan Against PPF	Partial Withdrawal
Timing	3rd to 6th year	After 6th year
Amount Limit	25% of 2nd FY prior balance	50% of lower balance (as explained)
Interest Cost	PPF rate + 1%	No interest
Repayment	Mandatory, within 36 months	Not required
Impact on PPF	Temporary loan, repaid	Permanent reduction in balance

Visit your bank/post office branch where PPF is held.
Submit Form D (for loan) or Form C (for withdrawal) along with:
- Passbook copy
- ID proof
- Reason (in some cases)
Some banks offer online applications for PPF loan/withdrawal.