PPF account: Why investors should be aware of Form H

• PPF accounts have a maturity of 15 year

• It can be extended with or without making further contributions

When it comes to maturity time, PPF or public provident fund account holders should know about Form H. PPF accounts mature in 15 years. However, they can be extended beyond 15 years in blocks of five years. There is no limit on the number of blocks it can be extended. In addition, PPF accounts can be retained with or without making further contributions. The corpus will earn continue to earn interest till it is closed.

If PPF account holders want to continue with the contribution mode after maturity, they will have to submit Form H within one year from the date of maturity of the account. Otherwise, fresh deposits into PPF account will not earn any interest. Also, the fresh deposits in the PPF account will not be eligible for deduction under Section 80C of the Income Tax Act.

PPF Form H is a simple one-page form which can be downloaded from the websites of banks and India Post. The account holder has to submit the form at the post office or bank where the account is held.

PPF Form H for account extension (Source: India Post)

After extension of the PPF account, the subscriber becomes eligible for making one partial withdrawal every year but the total withdrawals, during the five-year extended block period, cannot exceed 60% of the account balance at the start of the five-year period.

If PPF account holders don't close the account or submit Form H after the account matures no fresh contribution will be allowed but the balance will continue to earn interest.

Financial planners say that if account holders want to continue with their PPF account, it is preferable to extend the account rather than close and open a new account. If the account is extended, subscribers become eligible for partial withdrawals each year.