PPF Account After Maturity: Close, Extend, or Withdraw? Know All the Rules

Balasahana Suresh
The Public Provident Fund (PPF) is one of India’s most popular long-term investment options, offering tax benefits and guaranteed returns. However, many investors are often unsure about what to do once their PPF account matures after 15 years. Here’s a comprehensive guide to help you make informed decisions.

1. Maturity of a PPF Account

A PPF account matures after 15 financial years from the end of the year in which the account was opened. For example, if your account was opened in 2008–09, it will mature at the end of 2023–24.

At maturity, the account holder has three main options:

2. Option 1: Withdraw the Full Amount

You can withdraw the entire balance upon maturity. Key points:

  • The maturity proceeds are completely tax-free under Section 10(10D) of the Income Tax Act.
  • You can use the funds for any purpose: retirement planning, buying property, investing elsewhere, or personal needs.
  • The withdrawal process is straightforward: submit Form C or PPF withdrawal request to your bank or post office.
💡 Tip: Plan withdrawals carefully if you rely on PPF for retirement, as you’ll lose the guaranteed long-term compounding benefit.

3. Option 2: Extend the PPF Account

If you don’t need the funds immediately, you can extend your PPF account in blocks of 5 years indefinitely.

  • You can continue to earn interest on the balance.
  • During the extended period, contributions are optional, meaning you can deposit any amount up to ₹1.5 lakh per year.
  • Interest continues to be tax-free, and the account maintains its PPF benefits.
Key Rules for Extension:

Notify your bank or post office using Form H.

You can extend with or without making further contributions.

If you extend without contributions, you earn interest only on the balance at maturity.

If you continue contributing, you can deposit up to ₹1.5 lakh per year.

Interest is calculated on the closing balance each month, similar to the original 15-year period.

💡 Smart Strategy: Extending the PPF without contributions is ideal if you want to preserve tax-free interest while exploring other investments with higher returns.

4. Option 3: Partial Withdrawal After Extension

After extending the PPF account, you can make partial withdrawals:

  • Only one withdrawal per financial year is allowed.
  • Maximum withdrawal = 50% of the balance at the end of the preceding financial year or 50% of the balance at the end of the 4th year before withdrawal, whichever is lower.
This flexibility allows you to access funds when needed while keeping the rest invested to continue earning tax-free interest.

5. What Happens if You Do Nothing?

If you don’t close or extend the account after maturity:

  • The account continues automatically as an extended PPF account without further contributions.
  • Interest continues to accrue at the same rate as the last financial year.
  • You can choose to deposit later, withdraw, or close anytime.
6. Tax Benefits After Maturity

  • All interest and maturity proceeds are completely tax-free.
  • Contributions during extended years also continue to qualify for Section 80C deduction (if you make deposits).
  • This makes the PPF account a powerful tool for long-term tax-free wealth creation, even beyond the initial 15 years.
✅ Key Takeaways

Withdraw in full if you need liquidity or have other investment plans.

Extend the account if you want to keep earning tax-free interest, either with or without contributions.

Partial withdrawals are allowed after extension, offering flexibility.

Doing nothing automatically converts your PPF into an extended account.

PPF remains one of the safest and most tax-efficient investment options in India.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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