Zee Media Bureau
New Delhi: The Finance Ministry on Monday allowed subscribers of the Public Provident Fund (PPF) to prematurely close the deposit scheme after completing five years for reasons such as higher education or expenditure towards medical treatment.
Here are the key facts you should know about the premature PPF withdrawal:
1. A subscriber shall be allowed premature closure of his account or the account of a minor of whom he is the guardian, on a written application to the accounts office, on any one of the following grounds namely:
-That the amount is required for the treatment of serious ailments or life threatening diseases of the account holder, spouse or dependent children or parents, on production of supporting documents from competent medical authority;
-That the amount is required for higher education of the account holder or the minor account holder on production of documents and fee bills in confirmation of admission in a recognised institute of higher education in India or abroad;
2. Such premature closure shall be allowed only after the account has completed five financial years.
3. Premature closure shall be subject to deduction of such amount which shall be equivalent to one percent less interest, payable on the deposits from the date of opening of the account till the date of such premature closure. For instance, instead of an interest of the current 8.1 percent, a subscriber who chooses to prematurely close his PPF account would earn interest of 7.1 percent on the deposit.
At present, withdrawals from the PPF account are allowed after seven years of opening the account. But it is only up to 50 percent of the total deposit till the end of the fourth year. The account matures after 15 years, when full withdrawal is permitted.