Skip to main content

Rules of PPF Withdrawal

Best SIP Funds to Invest Online 


Rules of withdrawal from PPF

You can withdraw from your PPF starting from the seventh year. So, if you go back to our above-mentioned example, for an account that was opened in 2014-15, the withdrawal facility will start from the April 1, 2020.

There are limits on the amount of money that you can withdraw from the account.

As per the PPF scheme rules, a person can withdraw lower of the following:
a) 50 per cent of the balance available at the end of fourth year immediately preceding the year of withdrawal; or
b) 50 per cent of the balance stood at the end of the preceding year

For instance, if your PPF account was opened during the financial year 2011-12 and if you visit the branch any day during FY2017-18 to apply for a loan, then the amount you are eligible will be calculated as:

If there is any loan taken by the subscriber earlier which remains unpaid at the time of withdrawal, then it will be subtracted from the withdrawal amount he/she is eligible for. Further, this facility is available only once a year.

Premature closure of PPF account
As per earlier rules, a PPF account could not be closed before maturity of 15 years. However, the government, by amending the Public Provident Fund Act in 2016, has allowed premature closure if either of these conditions are met:

a) The account must have completed five financial years and,
b) The amount is required for the treatment of serious ailments or life-threatening disease of the account holder, spouse, dependent children or parents, or,
c) For higher education of account holder or in case of a minor account holder.

The subscriber will have to produce supporting documents as required.

However, there is a catch. You will not get the full amount as shown in your account. As per the amended rules, if a person wishes to use the premature withdrawal facility, he or she will be subjected to one percent less interest rate from the interest rate as applicable to him in case he or she has not opted for the facility.

This can be explained as follows for an account opened in the financial year 2011-12:

From the above table it is clear that since you have opted for the premature withdrawal facility, the interest applicable for your deposits have been reduced by 1 per cent (from 8.60% to 7.60% in FY 2011-12 and so on).

Had you not exercised the option of premature closure the balance shown in your account for the FY 2016-17 would be as:



SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Popular posts from this blog

Save Tax With Mutual Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300       Mutual funds are ideal as long term investment avenues for retail investors. To encourage investments in this avenue, the Government of India offers investors a spate of tax benefits thus ensuring maximum benefit from mutual funds held beyond a year. Sample some of the key benefits and refer to the table for a detailed list of tax rates for different types of schemes ·        Avail deductions under Sec 80C of the Income Tax Act by investing up to a maximum of Rs. 1 lakh in designated Equity Linked Savings Schemes (ELSS). Such investments have a compulsory lock in period of 3 years. ·        First time retail investors in equity with a gross total income of up to Rs. 12 lakh can invest up to Rs. 50,000 in specific MF schemes un...

How much to invest in gold ?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India) Let your motivation dictate the share of the yellow metal in your portfolio Enough has been said and written about gold as an investment option. The latest argument is that the craze for gold among Indian households is endangering our country's balance of payments. The policymakers are busy trying to find ways of discouraging investment in gold, but if households keep the common good in mind, they would be paying the market price for gas cylinders as they do for, say, their mobile phone bills. After all, private decisions are driven by private motives. So, how should a household look at gold from its own perspective? Gold is primarily acquired for its merit as a store of value. Even if the worst crisis hits a family, the gold that it holds could be put to use anywhere in th...

Buying a Used Car

Invest in Mutual Funds Online Download Mutual Fund Application Forms   Pre-owned car can make sense in these inflationary times. But buying one can be trickier than getting a new vehicle    If you are thinking of buying a car but are worried about the rising inflation and higher EMIs eating into your budget, you should consider buying a used car. For those learning to drive, the general advice is that they should hone their driving skills in a used car. However, buying a used car is not an easy task. Though a used car costs less, there are a lot of aspects to be considered while buying one. You should do your due diligence before buying such a car. For example, two cars of the same model would carry two different prices. The difference in price could be on account of the age of the car, how many people have driven, etc. First Fix Your Budget Since used cars are available in a wide variety of models and prices, the starting point would be to determine your budget befor...

Debt Mutual Funds Best Fixed Income Investments

Debt Mutual Funds - Invest Online     In the last one year, except for a select few sectoral funds and small cap funds, not many of the equity funds have given great returns. On the other hand, debt funds have done relatively well in terms of returns. So far in the new year too, the stock market has been extremely volatile, pushing investors to look for safer havens. In this context, debt funds are looking safer bets for those investors who do not have the appetite for higher level of volatility. Investors who look for a regular income stream, also look at fixed income products like debt funds, bank fixed deposits and post office monthly income schemes.  Among the fixed income products, debt funds score over others because of chances of higher return, has nearly similar level of risks and liquidity. According to Shah, people looking for regular income could opt for a systematic withdrawal plan (SWP) in debt funds , which, if done judi ciously could also save on taxes. Shah explaine...

MNC Funds

An investor is typically suggested a combination of large-, mid and multi-cap equity funds, in varying proportions, to create a well-rounded equity portfolio. It is usually recommended that investors stay away from the more exotic offerings such as thematic funds. However, the consistent strong performance of MNC themed funds may be a compelling reason for investors to make space in their portfolio for these funds. MNC funds invest in multinational companies—businesses that derive a sizeable chunk of their revenue from overseas operations or via exports to foreign countries. Among the MNC-themed funds, only UTI MNC and Aditya Birla Sun Life MNC have been around for a long time. SBI Magnum Global only recently aligned 100% to this theme, moving away from its earlier mid-cap focus with an MNC bias. These funds have shown a high degree of consistency in their returns. For instance, during the past one year of high volatility in the equity markets, the...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now