Want to withdraw funds from your PPF account? Here are the rules you need to know
Interestingly, the premature withdrawal is also exempted form tax.
The Public Provident Fund is still one of the preferred modes of long term investment. The PPF, a small savings scheme backed by the government not only offers the individuals an attractive interest rates but also complete safety and security of the investment. This long term investment is favoured over other modes of investment as it remains unaffected by the existing market volatility and there is no tax deduction on the investment.
Moreover, the returns generated are exempted from tax. Since it is a long term investment, the PPF account cannot be closed until the maturity period of 15 years. In other words, the account holder avails the returns as well as the entire amount standing only after the maturity period of 15 years.
However there are certain rules that one needs to know if one is in dire need of funds and has no choice but to withdraw from the PPF account. In such a case, one can get the funds by making partial withdrawals. The scheme permits the account holder to make a partial withdrawal from year 7 (or after completing 6 years).
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Moreover, the account holder can do withdrawals on a premature basis after the end of the fourth year. Also, one can make only one withdrawal per financial year. Interestingly, the premature withdrawal is also exempted form tax. If you are one of those who wish to withdraw funds from your PPF account, whether partial or complete funds, you need to present an application for withdraw in Form C, to the concerned bank branch you have your PPF account. The form has the following sections which the account holder needs to fill to avail the funds,
Here the account holder needs to mention their PPF account number and the withdrawal amount. Moreover, you need to mention the years that have passed since the account was opened.
2.Details related to the PPF account:
The date when PPF account was opened
The total balance standing in the PPF account
Date of the previous withdrawal request
Total withdrawal amount available in the account
The amount approved for withdrawal
The date and signature of person in charge. Generally, it is the service manager.
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3 Bank Details:
Fill in the details of the bank where money is to be credited. It can also be the bank details of the individual in whose favor the cheque or demand draft will be issued. The account holder also has to enclose a copy of the PPF passbook when submitting the required documents.