The government has amended PPF(Public Provident Fund) rules and has allowed PPF accounts to be closed before maturity in certain situations.
A PPF account can be closed prematurely by submitting a written application in case of any of the following situations-
- For medical emergency – The amount in PPF account is required for treatment of a serious ailment or life threatening disease of account holder, spouse, dependant children or parents. Document required – Such a request will have to be supported by a certificate from an appropriate medical authority.
- For higher education – The amount in PPF account is required for higher education of account holder or minor account holder. Document required – Such a request will have to be supported by documents and fee bill and confirmation of admission in a recognised institute of higher education in India or abroad.
Impact on Interest rate – In case of premature withdrawal 1% less interest shall be paid on the applicable interest rate.
Investments PPF account are eligible for deduction under section 80C of the income tax act.
As per Ministry of Finance notification dated 18th June 2016 (Public Provident Fund (Amendment) Scheme, 2016’