ir I have opened PPF account in 1998 and thereafter continuous depositing the money . As on 01.04.2022( After25 Years) my corpus was 8.5 Lacs and did not know the time frame of extension and deposited 1.5 lacs April-23 . Suddenly i come to know that my account now has been extended till March -2028 . Now i need money becz of extreme emergency . Please guide the penalty clause of 1% reduction will be from 01.04.2023 (Date of extension ) or since the date of opening the account . Its premature closure but after 25 Years but before 30 years.

Ans: You can now withdraw your entire PPF account balance and close it without needing to contribute again in April 2024. Your PPF account will be maturing on April 9, 2024, after completing 15 years from the opening date (April 9, 2009).

Just remember to visit your bank or post office with your passbook and withdrawal form to initiate the process.

Ans: You will be allowed to withdraw 60% of the balance at the beginning of extended period (block of five years).
It means, let us say the account matured on 1st April 2023 and the available balance is Rs.8.5 Lakhs. Then, you are allowed to withdraw 60% of this Rs.8.5Lakhs during the block period of 5 years. This can be withdrawn either in a single withdrawal or in instalment each year. However, only one withdrawal is allowed in a financial year.

Ans: The penalty for premature closure of a PPF account after 25 years is typically 1% reduction in the interest rate that would have been earned. This penalty is applied from the date of the extension, not from the date of opening the account.

Given your situation where you're facing an emergency and need to withdraw funds, it's important to understand that while PPF offers excellent tax benefits and compounding growth, it's also meant to be a long-term investment with a lock-in period of 15 years. Even after this period, partial withdrawals or loans are allowed under specific conditions, but the full withdrawal before maturity attracts the penalty.

In emergencies, it might be worth considering other available options before prematurely closing your PPF account, such as taking a loan against the PPF balance or exploring other liquid assets you might have. However, if you find that closing the PPF account is your only option, do factor in the penalty and tax implications to make an informed decision.

Always consult with a financial advisor or tax consultant to understand the implications fully and make the best choice for your situation.