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Investing

PPF Withdrawal, Loan and Extension Rules

PPF allows a loan in years 3 to 6, one partial withdrawal a year from year 7, early closure after 5 years for set reasons, and 5-year extensions.

PN

Written by Priya Nair

Published 2 October 2026·7 min read

On this page9 sections
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PPF lets you take a loan from the 3rd to the 6th financial year and one partial withdrawal a year from the 7th. Early closure is allowed after five years, only for illness, higher education or a move abroad. After 15 years you can close the account or extend it in five-year blocks.

Key facts

Facility When How much Form (PPF Scheme, 2019)
Loan From the 3rd to the 6th financial year Up to 25% of the balance at the end of the 2nd year before the year you apply Form-2
Partial withdrawal From the 7th financial year, once a year Up to 50% of the lower of two balances (see below) Form-2
Premature closure After 5 years, for listed reasons only Full balance, with interest cut by 1 percentage point Form-5
Closure at maturity After 15 years Full balance with interest Form-3
Extension with deposits Apply within 1 year of maturity Blocks of 5 years Form-4

PPF earns 7.1% a year for July to September 2026, the same rate since April 2020. The rules come from the Public Provident Fund Scheme, 2019, notified under the Government Savings Promotion Act, 1873. The “year” in these rules is the financial year, and the count starts from the year you opened the account.

Loan against PPF: window, amount and interest

You can apply for a loan any time after one year from the end of the financial year in which you opened the account. The window closes five years from the end of that same year. For an account opened in 2024-25, loans are available from 1 April 2026 to 31 March 2030.

ItemDetails
Amountup to 25% of the balance at the end of the second year before the year you apply. If you apply in 2026-27, that is the balance on 31 March 2025.
Interest1% a year if you repay the principal within 36 months. Otherwise the rate becomes 6% a year on the outstanding amount, counted from the month after you took the loan.
Repaymentprincipal first, in a lump sum or instalments, then the interest in up to two monthly instalments.
Limitsone loan a year, and no new loan until the earlier one is fully repaid with interest.

Unpaid interest is debited to your PPF account at the end of each year. If the account holder dies, the nominee or legal heir pays the unpaid interest when the account is closed.

Partial withdrawal: when and how much

Withdrawals open once five years have passed from the end of the year you opened the account, which is the 7th financial year. The cap is 50% of whichever is lower:

  • the balance at the end of the fourth year before the year of withdrawal, or
  • the balance at the end of the previous year.

For a withdrawal in 2026-27, compare the balances on 31 March 2023 and 31 March 2026, take the lower one and halve it. Three more conditions apply:

  • Only one withdrawal a year.
  • Any outstanding loan and its interest must be repaid first.
  • Discontinued accounts, where the ₹500 minimum was not deposited, get no loan or withdrawal until they are revived. Revival costs ₹50 plus ₹500 for each year missed.

The withdrawal does not have to be returned. Post office account holders can also make eligible PPF withdrawals through India Post internet banking.

Premature closure: reasons and penalty

An account can be closed early only after five years from the end of the year it was opened, and only on one of these grounds, with proof:

  1. Treatment of a life-threatening disease of you, your spouse, dependent children or parents, backed by medical reports.
  2. Higher education of you or your dependent children in India or abroad, backed by admission papers and fee bills.
  3. A change in your residency status, backed by passport and visa or your income tax return.

The penalty is a lower interest rate. Interest for the whole period is recalculated at 1 percentage point below the rates credited, from the date of opening. For an extended account, the Public Provident Fund (Amendment) Scheme, 2023 counts this from the start of the current five-year block.

At maturity: close, extend with deposits, or extend without

The account matures 15 years after the end of the year it was opened. An account opened in 2011-12 completes 15 years on 31 March 2027, so you can close it from 1 April 2027. You then have three choices.

Option What you do Withdrawals allowed
Close the account Submit Form-3 with the passbook Full balance, with interest to the end of the previous month
Extend with deposits Submit Form-4 within one year of maturity Total of 60% of the balance at the start of the block, over the five years; once a year
Extend without deposits Do nothing; the balance keeps earning interest Any amount, once a year

If you miss the one-year window for Form-4, you cannot deposit again. Any deposit made anyway is refunded without interest. Once an account has run without deposits for more than a year, you cannot switch back to deposits. An extension request cannot be withdrawn later, and the same choices return at the end of each block.

Forms and where to submit

  1. Identify the facility you need and its form: Form-2 for a loan or withdrawal, Form-3 for closure at maturity, Form-4 for extension, Form-5 for premature closure.
  2. Get the form from your post office or bank branch. Banks such as SBI and HDFC Bank publish their own versions under the same form numbers.
  3. Fill in the account number, the amount, and your savings account for the credit.
  4. Attach the passbook and supporting documents, such as medical reports or fee bills for premature closure.
  5. Submit it at the branch or post office that holds the account. A guardian signs for a minor’s account and adds the certificate printed on the form.
  6. Check that the credit appears in your savings account and the passbook is updated.

The loan and withdrawal limits depend on your year-end balances. Our PPF account guide covers opening and deposits, and the PPF calculator projects your balance year by year.

Tax on PPF withdrawals

Payments from PPF are exempt from income tax. For tax year 2026-27 the exemption sits in Schedule II of the Income-tax Act, 2025, item 3, which replaced Section 10(11) of the Income-tax Act, 1961. That covers interest, partial withdrawals and the maturity amount. Deposits of up to ₹1,50,000 a year qualify for the deduction formerly under Section 80C, now Section 123 of the 2025 Act, but only if you choose the old tax regime. A PPF loan is not income, so it is not taxed.

Frequently asked questions

When can I withdraw money from my PPF account?

Partial withdrawal is allowed once a year from the 7th financial year, counted from the year you opened the account. Before that, you can only take a loan (years 3 to 6) or close the account for a permitted reason after five years.

How much can I withdraw from PPF?

Up to 50% of the lower of two balances: the one at the end of the fourth year before the withdrawal year, and the one at the end of the previous year.

What is the interest rate on a PPF loan?

1% a year if you repay the principal within 36 months. After that, 6% a year applies on the outstanding amount from the month after the loan.

Can I close my PPF account before 15 years?

Yes, after five years, but only for a life-threatening illness, higher education or a change in residency status. Interest is recalculated at 1 percentage point less.

What happens if I do not submit Form-4 after maturity?

The account continues without deposits and keeps earning interest. You can withdraw any amount once a year but cannot make fresh deposits.

Can a nominee continue a PPF account after the holder’s death?

No. The account must be closed, and the balance earns interest until the end of the month before payment.

Is PPF withdrawal taxable?

No. Withdrawals, interest and the maturity amount are exempt from income tax.

Sources

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