PPF Withdrawal, Loan and Extension Rules Explained

Updated Oct 26, 2026 Saral Jankari Team

When you can take a loan against PPF, when partial withdrawal starts, when you can close the account early, and how the 5-year extension works, with simple examples.

PPF locks your money for 15 years, but it is not completely locked. You can borrow against it early on, withdraw part of it later, close it early in special cases, or extend it after 15 years. This guide explains each option in plain words. The examples assume you deposit ₹1,50,000 every year by 5 April at 7.1%, as in our interest guide.

At a glance

Option	When it is available	How much
Loan	From the 3rd to the 6th financial year	Up to 25% of the balance at the end of the 2nd year before the year of the loan
Partial withdrawal	From the 7th financial year	Up to 50% of an earlier balance (see below)
Premature closure	After 5 completed financial years, on specific grounds	Full balance, with interest reduced by 1%
Extension	After 15 years, in blocks of 5 years	Withdrawals up to 60% of the balance if you keep depositing

1. Loan against PPF

From the third financial year to the sixth, you can take a loan from your own PPF account.

Limit: 25% of the balance at the end of the second financial year before the year in which you apply.
Repayment: within 36 months.
Interest on the loan: 1% a year if you repay within 36 months, and 6% a year after that.
You cannot take a second loan until the first is fully repaid.

Example: You apply in the third financial year. The balance at the end of the first financial year was ₹1,60,650. A quarter of it, ₹40,162, is the most you can borrow.

2. Partial withdrawal

From the seventh financial year onwards, you can withdraw part of your balance. The limit is 50% of the balance at the end of the 4th financial year before the year of withdrawal, or at the end of the previous year, whichever is lower. You can make one withdrawal in a financial year.

Example: You apply in the seventh financial year. The balance at the end of the third financial year was ₹5,16,978. Half of it, ₹2,58,489, is the most you can withdraw (assuming the balance at the end of the previous year is higher, which it is in this example).

3. Closing the account early

You can close a PPF account before 15 years only after 5 completed financial years, and only on these grounds:

Treatment of a life-threatening disease of the account holder, spouse or dependent children or parents.
Higher education of the account holder or dependent children.
A change in the account holder’s residency status (for example, becoming a non-resident).

You will need supporting documents. On early closure, the interest is reduced by 1 percentage point from the date the account was opened or last extended. Check the exact papers needed with your bank or post office.

4. Extending the account after 15 years

When the account matures, you have three choices:

Close it and take the full balance.
Extend for 5 years without new deposits. Your balance keeps earning the PPF rate, and you can withdraw as much as you like, once a year. This is the default if you do nothing.
Extend for 5 years with new deposits. You must submit Form 4 within one year of maturity. You can keep depositing up to ₹1,50,000 a year, and you can withdraw up to 60% of the balance you had at the start of the 5-year block, spread over the block, with one withdrawal a year.

Example: If the balance at maturity is about ₹40.68 lakh, then 60% is about ₹24.4 lakh available to withdraw over the next five years, while the rest keeps growing.

You can extend again and again in blocks of 5 years. If you extend with deposits, remember to submit Form 4 on time. If you miss that window, the extension is treated as one without deposits.

Things to remember

The account must be active (minimum ₹500 deposited every year) to take a loan or a withdrawal.
Years are counted as financial years (1 April to 31 March), starting from the year in which you open the account.
Amounts withdrawn from PPF are not taxed under current rules. See our tax guide.

Sources

Last checked: 27 October 2026. Rules can change, so confirm the latest details and the forms needed with your bank or post office before you apply. This guide is general information, not financial advice.