A PPF account permits a partial withdrawal after five years have expired from the end of the financial year in which it was opened. The amount is capped at 50% of the lower of two specified year-end balances. This is why completing five calendar years from the opening date does not, by itself, settle whether a withdrawal is available.
The rules also distinguish a partial withdrawal from closing the account. A withdrawal leaves the account running. Maturity and premature closure have separate conditions, forms and consequences.
| Question | Rule before maturity |
|---|---|
| When can a partial withdrawal begin? | After five years from the end of the opening financial year |
| How often? | Once in a financial year |
| Which form? | Form 2 |
| Account condition | Must not be discontinued; outstanding loan and interest must first be repaid |
PPF withdrawal after five years: count from the financial year end
Paragraph 10 of the official PPF Scheme starts the waiting period at the end of the opening year. The scheme defines a year as a financial year. It does not start the clock on the anniversary of the first deposit.
For example, suppose an account was opened on 15 October 2020, within financial year 2020-21. That year ended on 31 March 2021. Five years expired on 31 March 2026, making financial year 2026-27 the first eligible withdrawal year. This is a calculated illustration of the rule, rather than a statement about a particular customer's account.
How to calculate the PPF withdrawal limit
Compare the balance at the end of the fourth year immediately preceding the withdrawal year with the balance at the end of the immediately preceding year. Use whichever is lower, then take 50% of that amount. The formula is: maximum partial withdrawal = 0.50 × lower eligible balance.
For a withdrawal in 2026-27, the two comparison dates are 31 March 2023 and 31 March 2026. Assume, purely for illustration, that those balances are Rs 2,40,000 and Rs 4,80,000. The lower figure is Rs 2,40,000, so the ceiling is Rs 1,20,000. Taking half of the latest balance would give Rs 2,40,000 and would incorrectly double the permitted amount in this example.
The scheme requires repayment of an outstanding PPF loan and its interest before this withdrawal facility is used. It also restricts the facility to accounts that have not become discontinued. SBI's PPF FAQ confirms that discontinued accounts need revival before loan or partial withdrawal facilities are available.
Form 2, maturity and premature closure are different routes
The scheme directs the account holder to apply to the accounts office in Form 2 for a partial withdrawal. Check the opening financial year, both comparison balances and the account's status before completing it. The official form is also reproduced in the Gazette scheme hosted by India Post.
Normal maturity comes after 15 years from the end of the opening financial year. The account can then be closed through Form 3. If it is retained without further deposits, the scheme allows one withdrawal in each year of any amount within the available balance. An extension with deposits uses five-year blocks and has a separate 60% block-period withdrawal ceiling.
Premature closure uses Form 5 and is restricted to specified grounds, including qualifying medical treatment, higher education and a change in residency status. It has its own waiting period and interest adjustment. A routine partial withdrawal should therefore not be described as an early closure request.
Related explainers: gold ownership and redemption rules, bank deposit insurance limits and FD interest and quarterly compounding.
