PPF Withdrawal Rules 2026: Partial Withdrawal, Loan Against PPF, and Premature Closure Explained

By Nitish Bharadwaj · Published Jul 12, 2026 · 6 min

PPF allows partial withdrawal only from the 7th financial year, capped at the lower of 50% of your balance at the end of the 4th preceding year or 50% of the immediately preceding year's balance. A loan against PPF is available only between the 3rd and 6th year, at 1% above the PPF rate if repaid within 36 months. Premature closure before 15 years is allowed on just three grounds — critical illness, higher education, or NRI status — with a 1% interest penalty applied across the entire tenure.

PPF's 15-year lock-in isn't as rigid as it sounds — there are three distinct ways to access money before maturity: partial withdrawal, a loan against your balance, and premature closure. Each opens at a different point in the account's life, uses a different formula, and applies to different situations, and mixing them up is the most common mistake PPF holders make when they actually need the money.

The Three Ways to Access PPF Money Early, at a Glance

Partial Withdrawal: Only From the 7th Financial Year

You can make your first partial withdrawal only after completing 6 financial years from account opening — i.e., from the 7th year onward. The maximum you can withdraw is the lower of two numbers: 50% of the balance at the end of the 4th year immediately preceding the year of withdrawal, or 50% of the balance at the end of the year immediately preceding the withdrawal. In an account that's still growing, the first (older) balance is almost always the smaller, binding figure. You're allowed one withdrawal per financial year, and since PPF carries EEE tax status, the amount withdrawn is entirely tax-free — no separate exemption needs to be claimed.

Loan Against PPF: A Narrow 4-Year Window That Closes Exactly When Withdrawal Opens

A loan against your PPF balance is available only from the 3rd financial year through the end of the 6th year — the window closes the moment partial withdrawal eligibility begins in year 7, so you'll never have access to both at the same time. The maximum loan is 25% of the balance at the end of the 2nd financial year immediately preceding the year you apply.

Premature Closure: Only Three Grounds Qualify

Closing a PPF account entirely before its 15-year term is allowed only after 5 completed financial years, and only on one of three specific grounds: a life-threatening disease requiring medical treatment for the account holder, spouse, dependent children, or dependent parents (with documentation); higher education of the account holder or dependent children (with admission proof and fee bills); or a change in residency status to NRI (with passport, visa, or equivalent proof). There's no general-purpose early-exit option outside these three.

• Life-threatening illness of self, spouse, dependent children, or dependent parents — needs medical documentation
• Higher education of self or dependent children — needs admission proof and fee bills
• Change of residency status to NRI — needs passport, visa, or equivalent proof

What Happens at 15-Year Maturity

At maturity, you have three options: withdraw the entire balance tax-free and close the account; extend without further contribution — this happens automatically if you take no action within a year of maturity, the balance keeps earning the PPF rate, and you can make one withdrawal of any amount per financial year with no percentage cap; or extend with contribution by submitting Form H within a year of maturity, in blocks of 5 years, continuing to deposit up to ₹1.5 lakh a year under 80C, with withdrawals in that block capped at 60% of the block's opening balance, one per year.

The current PPF rate is 7.1% per annum for the July-September 2026 quarter, unchanged since April 2020 — a long-standing rate, not a recent change. If you're deciding whether to use a PPF loan versus one of these withdrawal routes, our NPS vs PPF retirement comparison and home loan Section 24/80C guide cover how PPF fits alongside your other old-regime tax-saving instruments, and our PPF calculator projects your maturity value across any contribution pattern. If you're saving specifically for a daughter under 10, our Sukanya Samriddhi Yojana guide covers why its 8.2% rate beats PPF for that particular goal, even though PPF remains the more flexible choice for your own long-term savings. PPF's tax-free-at-any-time withdrawal is also worth contrasting with your EPF balance from employment, which only becomes fully tax-free after 5 years of continuous service — see our EPF withdrawal tax rules guide for exactly how that clock is counted. And before you deposit into any of these accounts, get the timing right — our PPF interest calculation guide covers the 5th-of-the-month rule that decides whether your deposit earns interest for that month at all. If you're deciding whether to extend your account once it does mature, our PPF account extension guide breaks down the difference between extending with contribution and without, and exactly what Form H requires.