Loan and Withdrawal facility
Loan facility is available between third financial year to sixth financial year ie. from third financial year upto end of fifth financial year.
Withdrawal is available every year, from the 7th financial year onwards. At 7th year withdrawal available is 50% of the balance at the end of the 3rd year. At 8th year withdrawal available is 50% of the balance at the end of the 4th year. And so on…
UNDERSTANDING Loan And Withdrawal And Growth IN PPF
Suppose you opened the account on 22/12/2011 and below table will give you simple example when you can withdraw and take loan. If you add 15 yrs (Term of PPF account) to your account opening date it will be 22/12/2026 which you think maturity date. But it will mature on 1st April 2027 (which is first working day of FY 2027-28). So, it is exactly not 15 years but in practical it is around 16 years.
| Rs. 1000/- invested for 25 years regularly |
|---|
| Year | Investment | Interest | Total | Withdrawal | Loan |
|---|---|---|---|---|---|
| 1 | 1,000 | —– | 1,000 | —– | —– |
| 2 | 1,000 | 80 | 2,080 | —– | —– |
| 3 | 1,000 | 166 | 3,246 | —- | 250 |
| 4 | 1,000 | 260 | 4,506 | —– | 523 |
| 5 | 1,000 | 360 | 5,867 | —– | 820 |
| LOAN PERIOD OVER & WITHDRAWAL PERIOD STARTS |
|---|
| 6 | 469 | 7,336 | —- | —– | 1,143 |
| 10 | 1,000 | 999 | 14,487 | 3,668 | —- |
| 22 | 1,000 | 4034 | 55,457 | 18,725 | —- |
| 9 | 1,000 | 851 | 12,488 | 2,933 | —- |
| 23 | 1,000 | 4437 | 60,893 | 20,723 | —- |
| 11 | 1,000 | 1159 | 16,645 | 4,461 | —- |
| 15 | 1,000 | 1937 | 27,152 | 8,323 | —- |
| 24 | 1,000 | 4871 | 66,765 | 22,881 | —- |
| 14 | 1,000 | 1720 | 24,215 | 7,243 | —- |
| 7 | 1,000 | 587 | 8,923 | 1,623 | —- |
| 13 | 1,000 | 1518 | 21,495 | 6,244 | —- |
| 20 | 1,000 | 3316 | 45,762 | 15,162 | —- |
| 25 | 1,000 | 5341 | 73,106 | 25,211 | —- |
| 19 | 1,000 | 2996 | 41,446 | 13,576 | —- |
| 12 | 1,000 | 1332 | 18,977 | 5,318 | —- |
| 18 | 1,000 | 2700 | 37,450 | 12,107 | —- |
| 16 | 1,000 | 2172 | 30,324 | 9,489 | —- |
| 17 | 1,000 | 2426 | 33,750 | 10,748 | —- |
| 21 | 1,000 | 3661 | 50,423 | 16,875 | —- |
| 8 | 1,000 | 714 | 10,637 | 2,253 | —- |
Interesting unnoticed Points
Using withdrwal facility for creating tax free income for lifetime. How?
If you are depositng
- Rs 1000 p.a. from 11th year you can withdraw Rs 1000 as tax free income.
- Rs 1000 p.a. from 16th year you can withdraw Rs 2000 as tax free income.
- Rs 1000 p.a. from 20th year you can withdraw Rs 3000 as tax free income.
- Rs 1000 p.a. from 22th year you can withdraw Rs 4000 as tax free income.
This could be a good source of creating a tax free income for self or for your coming generations.