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PPF Extension

After the 15-year maturity, a PPF account can be extended in 5-year blocks either with continued contributions or without, allowing the corpus to keep earning tax-free interest.

Detailed Explanation

## Extending Your PPF After Maturity When your PPF completes 15 years, you don't have to close it. You can extend the account in 5-year blocks, and there's no limit on the number of extensions. ## Two Types of Extension **Extension With Contributions:** - You continue depositing up to Rs 1,50,000/year - Your balance keeps growing with new deposits and interest - You must submit Form H within 1 year of maturity to opt for this - Withdrawal limit: Up to 60% of the balance at the start of each 5-year block, one withdrawal per year **Extension Without Contributions:** - You stop depositing, but the existing balance earns interest at the prevailing rate - No paperwork needed; it happens automatically if you don't submit Form H - You can withdraw any amount at any time (much more flexible) ## Why Extension Is Powerful After 15 years of contributing Rs 1,50,000/year, your corpus is roughly Rs 40.7 lakh. At 7.1%, this earns about Rs 2.9 lakh/year in tax-free interest. Extending lets this large base keep compounding. With continued contributions for another 5 years, you could reach Rs 65+ lakh. For another 10 years, over Rs 1 crore. All tax-free. ## Key Decision Point If you're still working and have income to invest, extend with contributions. If you're retired or don't need the 80C deduction, extend without contributions and enjoy the flexibility of withdrawing whenever you need. Model your extension scenarios with our [PPF calculator](/) to see how different strategies affect your long-term corpus.

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Related Terms

PPF

Public Provident Fund (PPF) is a long-term savings scheme backed by the Government of India that offers tax-free returns at 7.1% per annum with a 15-year lock-in period.

EEE Status

EEE (Exempt-Exempt-Exempt) status means an investment is tax-free at all three stages: when you invest, while it earns returns, and when you withdraw at maturity.

Section 80C

Section 80C of the Income Tax Act allows Indian taxpayers to claim a deduction of up to Rs 1,50,000 per year from their taxable income by investing in specified instruments like PPF, ELSS, and tax-saver FDs.

Compound Interest

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods, causing your money to grow exponentially over time.

Maturity Amount

The maturity amount is the total sum you receive when a PPF account completes its full tenure, including all your deposits plus accumulated compound interest.

Lock-in Period

The lock-in period is the minimum time you must keep your investment before you can withdraw. PPF has a 15-year lock-in, though partial withdrawals are allowed from year 7.

Partial Withdrawal

Partial withdrawal from PPF is allowed from the 7th financial year onwards, with the maximum amount being 50% of the balance from 4 years prior or the preceding year's balance, whichever is lower.

Loan Against PPF

PPF account holders can take a loan against their PPF balance from the 3rd to 6th financial year, borrowing up to 25% of the balance from two years prior at an interest rate of PPF rate plus 1%.

Tax-Free Returns

Tax-free returns mean the gains from an investment are not subject to income tax, allowing you to keep the full amount earned without any deductions for taxes.

Risk-Free Investment

A risk-free investment is one where your principal and returns are guaranteed, typically backed by a sovereign government. PPF is considered risk-free because it carries a Government of India guarantee.

PPF Account

A PPF account is a savings account opened under the Public Provident Fund scheme at designated banks or post offices, where deposits earn 7.1% annual interest with tax benefits under Section 80C.

Annual Deposit

The annual deposit in PPF refers to the total amount contributed to a PPF account in a financial year, with a minimum of Rs 500 and a maximum of Rs 1,50,000.

Interest Rate

The PPF interest rate is the annual rate at which your PPF balance earns returns, currently set at 7.1% per annum and revised quarterly by the Government of India based on government bond yields.

Sovereign Guarantee

A sovereign guarantee means the Government of India stands behind the PPF scheme, ensuring that both your principal and accumulated interest are fully protected regardless of economic conditions.