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PPF matures after 15 years. However, what if you need money before that? Can you withdraw funds prematurely? The answer is yes, but there are certain rules that you need to adhere to. In this article, we'll simplify the PPF partial withdrawal process for you.

Is It Possible to Withdraw PPF Amount Before Maturity?

PPF matures after 15 years. But what if you need money before that? Can you withdraw funds prematurely? The answer is yes. However, there are certain rules that come into play.

Let's simplify this process:

Understanding the Rules

Eligibility for Partial Withdrawals

There are two broad conditions that complicate the partial withdrawal rules for PPF:

The Year from Which You Become Eligible for Partial Withdrawals

Firstly, your account must complete at least 5 full financial years before you can apply for a partial withdrawal. This means that the financial year in which you initially invested doesn't count towards the five-year eligibility period. Let's understand this with an example and an illustration.

Example:

When did you make your first PPF investment? When does the countdown begin? When can you make a partial withdrawal?

Here's the example: Say you made your first PPF investment in August 2017. The countdown to meet the five-year eligibility period would start on April 1, 2018. Therefore, you can make a premature withdrawal starting from April 1, 2023.

The Amount You Can Withdraw

The amount you can withdraw follows a strict guideline:

Either 50% of the account balance at the end of the preceding financial year or 50% of the account balance at the end of the fourth year before applying for partial withdrawal, whichever is smaller.

Explanation: Say you made a premature withdrawal request in August 2023 and your PPF account had completed at least five financial years. You could withdraw either 50% of the balance at the end of FY23 (March 31, 2023) or 50% of the balance at the end of FY20 (March 31, 2020), whichever amount is smaller.

Example:

Assume you had Rs. 7 lakh at the end of FY23 (March 31, 2023) and Rs. 4 lakh at the end of FY20 (March 31, 2020). According to PPF rules, you can withdraw 50% of Rs. 4 lakh, i.e., Rs. 2 lakh. If you have sufficient funds in your account, you can make multiple premature withdrawals over the years.

However, you can make only one premature withdrawal each financial year.

Summary of Key Points

You can withdraw funds from your PPF account after completing at least 5 full financial years. The amount you can withdraw is either 50% of the balance at the end of the preceding financial year or 50% of the balance at the end of the fourth year before the application for partial withdrawal, whichever amount is smaller. You can make multiple premature withdrawals if your account has sufficient funds. You can make only one premature withdrawal each financial year.

By understanding these rules, you can make informed decisions about your PPF investments. Hope this helps!

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