People invest in PPFs to generate income in their retirement years because the returns are tax-free. As a result, PPF Extension is still useful after retirement. However some extension rules are applicable here.
Public Provident Fund (PPF) is 15 year, Central Government of India Saving Scheme. PPF is known for it’s safe and attractive returns.
PPF is a great investment scheme for risk averse investors. Further This scheme also provides diversification, tax benefit to investor (EEE advantage). Since this money can not be attached to court decree, it makes it more safer for investors with huge debts also.
Moreover, PPF account become safe heaven for senior citizens because of its tax free withdrawals and guaranteed safe returns.
Table of Contents
PPF Extension Rules
After completion of 15 years you get below mentioned 3 options
| Close the PPF Account | Extend PPF account with Contribution | Extend PPF account without Contribution |
| Close the PPF account and withdraw | Extend PPF account for a block of 5 Year and contribute regularly | Extend PPF account for a block of 5 year and do not contribute any amount |
You can extend your PPF account for any number of times. You can extend the PPF account for a block of 5 years.
PPF Extension
PPF Account Closure
You can close the account and take the maturity payment by submitting account closure form along with passbook at the concerned post office.
What if you do not take any action after PPF Maturity
IF you do not take any action after completion of 15 year then your PPF account is extended automatically and account continues to get interest as usual.
But, you can make one withdrawal per year after the extension.
PPF account extension with contribution
You can also choose to extend PPF Account with additional contributions each year to increase your corpus and to get tax deduction U/S 80 C. Here you are eligible to make one withdrawal in each FY subject to maximum limit 60% of balance credit (at the time of maturity in the block of 5 years)
You have to submit form H to extend your account with contribution within a year of original date of maturity of your account.
if you fail to submit form H then your PPF scheme will be extended without contribution
https://www.indiapost.gov.in/VAS/DOP_PDFFiles/form/ExtensionRD.pdf
PPF account Extension without Contribution
You do not need to take any action to continue your account without contribution or no new deposits. The regular interest rate will be applicable. You can close the account anytime in extended period. You can also take 1 withdrawal in each FY.
If you deposit money in such an account then your contributions will not get any interest and tax benefit under section 80C.
PPF withdrawal form
If you want to withdraw partially or completely from your public provident fund then you have to submit form C with the concerned branch of the bank where you opened the PPF account.
The form has three sections
1.Declaration Section
- Submit your PPF account number
- Amount of money you want to withdraw
- Number of years passed since account was opened
2.Office use section
3.Bank details section This section ask for the details of the bank where your money is to be credited directly or name of the bank in which you want your money back.
It is mandatory to enclose a copy of the PPF passbook along with this application
PPF withdrawal form is available for download from the website of respective Bank
https://retail.onlinesbi.com/sbi/downloads/PPF/FORM-C_(PPF%20WITHDRAWAL).pdf
Tax implications on PPF withdrawal
The withdrawal from PPF is exempt from Tax under section 80c of Income Tax Act 1961.
Public provident Fund/ PPF gives you triple E advantage that is whatever contribution you are making get tax deduction under 80C ,the interest is also exempt from tax and maturity is also tax free in nature.
Premature closure of PPF account
Pre mature closure of PPF investment is allowed after 5 year from the end of the year in which the account was opened subject to the following conditions:
- in case of threatening disease of account holder, spouse or dependent children
- Higher Education of account holder or dependent children
- If your Residency status changes, that is if you become a permanent resident of another country. In such case you can submit a copy of Passport and Visa or income tax returns for this matter.
Can I extend PPF account after maturity?
Yes, PPF can be extended after maturity for any number of times. However the extension period is 5 year only.
Should I extend PPF Account?
Looking at the benefits of this small saving scheme you should definitely extend the PPF account with or without deposits. and take tax free withdrawals. The benefit of extension is tax free withdrawals and freedom to close the account any time.
