June 22, 2016 | by Sreekanth Reddy
Public Provident Fund (PPF) is one of the best Debt oriented Saving options that are available in India. It is also one of the most tax-efficient financial instruments.
PPF Account has a lock-in period of 15 years. A Public Provident Fund (PPF) account gets matured after the completion of 15 years only.
There are certain options for an account holder to make partial withdrawals from PPF. But, a PPF account can be closed prematurely only in the event of the death of the Account holder.
The government has recently issued a notification announcing the latest PPF Account premature closure norms or rules. You can now close your PPF account before the maturity date.
When can I close my PPF Account prematurely?
As per the latest rules, a subscriber of PPF Account shall be allowed premature closure of his/her account (or) account of a minor of whom he/she is the guardian on the below mentioned reasons;
*.A PPF Account can be closed in the event of the death of the Account holder.
*.PPF Account Premature Closure is accepted when the amount is required for the treatment of serious ailments (or) life threatening diseases of the Account holder (self), Spouse, dependent children or parents of the Account holder.
*.PPF Account Premature Closure is also allowed when the amount is required for highereducation of the Account Holder(subscriber/self)or minor account holder.
*.Kindly note that you can close PPF account prematurely only if your account has completed FIVE Financial Years.(This rule is not applicable in case of‘death’ of the account holder.)
*.If the reason for Premature closure of PPF account is ‘medical treatment’, you have to produce supporting documents from competent medical authority.
*.If the reason for premature closure of PPF a/c is ‘higher education’, you have to produce fee bills and documents confirming admission in a recognized institute of higher education in India or abroad(foreign country).
*.Another important point is,a penalty of 1%is deducted from the applicable interest rates on the deposits held in the PPF account. This is applicable on the deposits from the date of opening of the PPF account till the date of premature closure of PPF account.