Public Provident Fund is a popular scheme, in which money is invested for a long time. One can invest in this with a minimum investment of Rs 500 to Rs 1,50,000 annually. It is a tax free scheme, that means you do not have to pay any tax on it.
This scheme gives the highest return of 7.1 percent after EPF, which comes under the purview of compounded quarterly. PPF account holders can also take a loan on their account at only 1% interest per annum, subject to certain conditions. It has a maturity period of 15 years. But if you want, you can close your account prematurely under some rules.
Here are some such rules, which must be known before withdrawing money. Otherwise, trouble may arise for you. Let us know what is this rule related to PPF…
- If you want to make premature withdrawal in PPF account, then you are allowed only after five years. That is, if you open an account in 2022, you can withdraw money in 2027-28. At the same time, if you need money before this, you will have to resort to another medium.
- You cannot withdraw all your money from your PPF account until the account matures after 15 years. That is, you can withdraw only some money ahead of time. The balance amount is paid only after the completion of 15 years.
- As per India Post guidelines, a customer can make only one withdrawal during a financial period after five years of account opening. This means if the account was opened during 2020-21 then withdrawal can be made during or after 2026-27.
- If you are taking the withdrawal amount on loan, then up to 50 percent of the amount can be taken.
- PPF is a tax-free scheme, so you do not have to pay any tax during premature withdrawal. There is no charge even for premature withdrawal from your PPF account.
Explain that if an investor tries to withdraw money without knowing these rules, then he may face difficulty in getting money. At the same time, investors taking loans should take information about this scheme in more detail from the post office or other means, so that there is no problem later.