PPF extension without contribution

A PPF account matures after 15 years. Suppose the subscriber does nothing as that date approaches. The account does not simply stop.

A default option takes over. It is called extension without further contribution.

There is no form to file for this default. It applies on its own, the moment the subscriber misses the one-year window to actively choose the other route instead.

Once in this mode, no new deposits are made, but the existing balance keeps earning the declared PPF interest rate, and the account can still be extended again in further 5-year blocks.

Withdrawal is far less restricted here than under the with-contribution option. A maximum of one withdrawal is allowed per financial year, but there is no 60% ceiling — any amount up to the entire balance in the account can be withdrawn, in that one withdrawal.

As with the with-contribution route, the choice cannot be switched later — a subscriber cannot decide midway through a block that they want to start contributing again without formally re-electing at the next extension point.

Illustrative figures. Mrs Chandran's PPF account matures with a balance of Rs 30,00,000. She takes no action, so the account rolls into extension without contribution by default.

Unlike the with-contribution case, she is not limited to 60%. In year 3 of this extension block, she can withdraw the entire Rs 30,00,000-plus balance (grown further by interest) in a single withdrawal that year, if she needs it — something a with-contribution extension, capped at 60% of the balance on the date of extension, would not permit.

The trade-off is that her balance stops growing from fresh contributions — only the interest on what is already there continues to accumulate.

Chapter 5 (Retirement Products), section 5.1.3, "Extension of account tenure," sets out the without-contribution route as the default choice, with its own one-withdrawal-a-year, no-ceiling rule. Expect a question contrasting this with the 60%-capped, Form-4 route, and a question on what happens if no election is made at all.

• This is the default, not an active choice — a subscriber who does nothing ends up here automatically, without filing anything.
• There is no 60% cap here, unlike the with-contribution route — up to the full balance can be withdrawn in the one permitted withdrawal each year.
• Only one withdrawal per financial year still applies, even though the amount is uncapped — a subscriber cannot take several smaller withdrawals across the year instead.
• No further contributions are accepted or interest-bearing under this option — money deposited by mistake earns no interest and gets no 80C deduction.