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Ppf withdrawal rules

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radha

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25 Points Posted on 27 November 2013

1. is there any tax on allowed premature withdrawal on ppf.

2. As interest on ppf is credited on 31st march . So lets say if i withdraw 1 lac in december 2013 . Will i get interest between april 2013 to november 2013 for that 1 lac rupee ? or there is no interest if you withdraw . betfore march 31

Thankyou

Replies (1)

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Posted on 28 November 2013

The interest rate in your PPF account is calculated on the lowest balance between the fifth and the last day of the month. Interest is compounded annually and credited on March 31 each year. So, you will get interest between April 2013 to November 2013 for that 1 lac rupees.

The entire amount in your account could be withdrawn only on maturity. You can withdraw once a year, from the 7th year onwards. Such withdrawals must not exceed 50 per cent of the balance at the end of the fourth year, or 50 per cent of the balance at the end of the immediate preceding year, whichever is lower. Premature closure of a PPF account is permissible only in case of death.

So, There is no Tax on Withdrawals.