Public Provident Fund (PPF) account holders must know about Form H when it comes to maturity. You must know that the PPF accounts mature after 15 years. However, applicants can choose to extend the maturity in the multiples of five years with no limitations. In addition, the account can be retained even without making further contributions. The corpus will continue to earn interest until the account is closed.
If the account holders want to continue to contribute funds after maturity, Form H must be submitted within one year from the date of maturity. Otherwise, the deposits made after maturity will not earn any interest. Also, the fresh deposits will not be eligible for tax deductions under Section 80C of the Income Tax Act.
Form H is a one-page form that can be downloaded from any bank’s website or from India Post’s website. The account holder must fill-up the form and submit it to the nearest bank or post office where the account is held.
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Once the account extension is done, the account holder will be eligible to make one partial withdrawal per year. However, the total withdrawals done during a five-year extended period cannot exceed 60% of the account balance as of the start of the five-year period.
In the case where the account is not closed or Form H is not submitted upon maturity, a fresh contribution cannot be made to the account. However, the account balance will continue to earn interest.
Financial experts state that extending the account for a five-year period is preferable rather than to close the existing account and open a new one. The extension opens the opportunity to partial withdrawal.
For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in
