PPF extension after 15 years: with-contribution vs without-contribution choice and the Form H deadline

The 15th anniversary of a PPF account is a quietly important date. The Public Provident Fund Scheme 2019 — which superseded the 1968 rules from 12 December 2019 — sets maturity at the end of 15 financial years from the year of opening (16 contribution years, counting the year you opened the account). On that day the entire balance is yours to withdraw tax-free under Section 10(11) of the Income-tax Act, 1961. But most subscribers do not close the account. They face a quieter decision: extend with fresh contributions, or extend without, and the choice has to be communicated within twelve months on Form H.

Get the paperwork right and the next five-year block compounds at the notified PPF rate — currently 7.1 percent per annum (last notified for Q1 FY 2025-26 and continuing into Q1 FY 2026-27) — with one liquid window each financial year. Miss the Form H deadline and your account silently slips into the default without-contribution mode; deposits attempted after that are rejected and there is no back-dated rescue.

This piece walks through the rule, the tax treatment, and a 10-year drawdown comparison between the two extension modes and the close-and-reinvest alternative for a Rs 35 lakh maturity corpus. The numbers below assume a steady 7.1 percent PPF rate; in practice the Ministry of Finance can move it quarterly.

The Scheme Explained

The PPF account runs on a fixed 15-year original tenor, with the maturity date falling on 1 April of the financial year following the completion of 15 years from the year of opening. PPF Scheme 2019 (notified by the Department of Economic Affairs and operated through India Post and authorised commercial banks) gives every subscriber three exits on that date.

Option 1: Close and withdraw. Submit Form C, take the entire balance to your savings account, and the account is shut. There is no reopening — a fresh PPF account would start a new 15-year clock.

Option 2: Extend with contributions, in five-year blocks. File Form H within one year of maturity. The account continues to accept up to Rs 1.5 lakh per financial year (the statutory ceiling under Section 4 of the Scheme, summed across all PPF accounts you hold). Partial withdrawals are capped at 60 percent of the balance standing to your credit at the start of the block, subject to one withdrawal per financial year. At the end of the block you may extend again — there is no statutory limit on the number of blocks.

Option 3: Extend without contributions, by default. If you do not file Form H within twelve months, the account is treated as extended without further contributions. Interest continues to accrue at the notified rate on whatever balance remains. Withdrawals are limited to one per financial year, of any amount you choose. This election is irrevocable: deposits attempted after the 12-month window do not earn interest and cannot be claimed under Section 80C.

The 7.1 percent rate has been in force unchanged since Q2 FY 2020-21 — among the longest unchanged small-savings rates on record. Interest is calculated on the lowest balance between the 5th and the last day of each calendar month, and credited at the close of every financial year, so depositing on or before 5 April captures a full year of compounding.

A side-by-side anatomy of the three options:

Loans under PPF exist only between the 3rd and 6th years of the original 15-year tenor and are repayable within 36 months. The loan facility does not revive in any extension block. In all extension blocks the cash door is partial withdrawal, nothing else.

Tax on Withdrawal

PPF sits in the small club of Indian savings products that enjoy full Exempt-Exempt-Exempt (EEE) treatment.

1. Contribution stage. Annual deposits up to Rs 1.5 lakh qualify under Section 80C of the Income-tax Act, 1961, but only if you have elected the old regime. The new default regime under Section 115BAC does not allow 80C, so a PPF contribution made by a new-regime taxpayer earns interest but does not reduce taxable income — the single biggest blind spot in extension planning, because new-regime subscribers have no tax reason to choose Option 2 over Option 3.
2. Interest stage. Interest credited under PPF Scheme 2019 is exempt under Section 10(11). It appears in the Annual Information Statement as exempt income and does not require disclosure in the return.
3. Withdrawal stage. All withdrawals — partial, full, or on closure — are tax-free in the subscriber's hands. Premature closure permitted after five years (for life-threatening illness, higher education, or change of resident status) carries a 1 percent penalty on accrued interest, but the withdrawal itself is not taxed.

Consider a 60-year-old whose 15-year-old PPF holds Rs 35 lakh and who is now in the new regime. Option 2 locks in 7.1 percent tax-free on incremental contributions but the 80C deduction is gone. Option 3 still gives 7.1 percent tax-free on the existing corpus while leaving Rs 1.5 lakh per year free to be deployed elsewhere — perhaps in the Senior Citizens Savings Scheme at 8.2 percent (taxable, with Rs 50,000 of interest exempt under Section 80TTB for senior citizens). Section 80CCD(1B) — the additional Rs 50,000 NPS deduction — is not allowed under the new regime — old-regime only.

Subscribers running a parallel NPS top-up alongside PPF Option 2 can model the post-60 split using our NPS calculator.

Worked Drawdown

Take Priya, a 58-year-old subscriber whose PPF account was opened on 5 May 2011, matured on 1 April 2026, and now holds Rs 35,00,000. She files her taxes under the new regime. She compares three paths over the next ten financial years, FY 2026-27 to FY 2035-36, assuming a steady 7.1 percent PPF rate throughout.

Path A — Close and reinvest in SCSS + POMIS. Priya withdraws Rs 35,00,000 on 1 April 2026 and deploys Rs 30,00,000 in the Senior Citizens Savings Scheme (the per-individual cap of Rs 30 lakh effective 1 April 2023) at 8.2 percent paid quarterly. The remaining Rs 5,00,000 goes into a 60-month Post Office Monthly Income Scheme at 7.4 percent. Interest is taxable at slab; Priya falls in the Rs 12,00,000-Rs 16,00,000 bracket of the new regime at a marginal 15 percent, with the Section 80TTB Rs 50,000 senior-citizen exemption available once she turns 60.

Path B — Extend with contributions and draw 60 percent each block. Priya files Form H by 31 March 2027, deposits Rs 1,50,000 each FY (no 80C in her case) and takes a yearly withdrawal of Rs 4,20,000 across the first block (totalling Rs 21,00,000 — the 60 percent cap on the opening Rs 35 lakh). The second block opens 1 April 2031 at a smaller balance, allowing a proportionately smaller drawdown.

Path C — Extend without contributions, draw Rs 3 lakh annually. Priya makes no election. She withdraws Rs 3,00,000 each year on 5 April for living expenses.

Year-end balances under each path (rounded to the nearest thousand):

Three observations the table itself does not spell out:

• Path A's apparent edge depends on slab. At a 15 percent marginal rate Priya nets Rs 24.9 lakh of post-tax interest. At a 30 percent slab her post-tax cash drops by roughly Rs 4 lakh and Path B catches up. For a taxpayer with total income below Rs 12 lakh — covered by the Section 87A rebate of Rs 60,000 in the new regime for FY 2025-26 — Path A wins outright because the SCSS interest carries no effective tax.
• Path B preserves liquidity. SCSS in Path A locks Priya into 5-year tenors with a 1.5 percent penalty if she breaks them between year 2 and year 5; PPF partial withdrawals carry no such penalty.
• Path C is the highest-cash, lowest-corpus route. It suits a subscriber who plans to drain PPF as a flat annuity and direct other assets to growth, and it needs zero ongoing administration.

Stress-test your own numbers in the retirement drawdown calculator and the annuity vs SWP comparator; the FIRE corpus calculator is useful for testing how a 10-year PPF runway interacts with the rest of the portfolio.

Five practical rules before filing Form H

1. The 12-month window starts from the maturity date, not the financial year close. A PPF account opened in FY 2010-11 matured on 31 March 2026; the Form H deadline is 31 March 2027. Banks will reject Form H filed on 1 April 2027 and treat the account as Option 3.
2. Form H is account-specific. Two PPF accounts (your own and a minor child's) need two separate Form H filings. The Rs 1.5 lakh per-PAN cap continues to bind across both.
3. HUF accounts can no longer be extended. Pre-existing HUF accounts that matured between 13 May 2005 and 12 December 2019 had to be closed; PPF Scheme 2019 does not permit HUF subscription at all.
4. NRIs cannot extend under either mode. Rule 3 of PPF Scheme 2019 bars extension by a person who is non-resident on the maturity date.
5. Refresh the nomination before extension. PPF Scheme 2019 allows up to four nominees with specified shares; nomination filed during the original tenor is binding on extended balances unless updated. The glossary entries on PPF and the Senior Citizens Savings Scheme cover the paperwork further.

The Rs 1.5 lakh contribution cap is per individual, not per household. A couple where both spouses hold PPF accounts in extension blocks under the old regime can deposit Rs 3 lakh in aggregate and claim Rs 1.5 lakh each — provided each subscription is funded from the individual subscriber's own taxable income to avoid Section 64 clubbing. The arithmetic does not help in the new regime, where neither spouse gets the 80C deduction.

FAQ

What is the deadline to file Form H after PPF maturity?

Twelve months from the maturity date. Filing on day 366 is invalid and forces the account into Option 3. PPF Scheme 2019 does not provide for condonation of delay by the bank or post office.

Can I extend a PPF account beyond one five-year block?

Yes. There is no statutory cap on the number of five-year extension blocks. Each fresh block requires a new Form H if you wish to keep depositing; an Option 3 account simply continues until you withdraw the full balance or close it.

Does the 7.1 percent rate stay fixed for the entire extension block?

No. The PPF rate is set quarterly by the Ministry of Finance under a formula linking it to the average 10-year G-Sec yield. The 7.1 percent rate has been unchanged since Q2 FY 2020-21, but every quarterly notification can move it. The historical PPF rate has ranged from 12 percent (1986) to 7.1 percent (April 2020 onwards).

Can I claim Section 80C on PPF contributions in extension blocks?

Yes, under the old regime, contributions during Option 2 extensions are eligible for the 80C deduction up to Rs 1.5 lakh per FY, subject to the overall 80C ceiling. New-regime taxpayers do not get 80C. Section 80CCD(1B) — the additional Rs 50,000 NPS deduction — is not allowed under the new regime — old-regime only — and does not apply to PPF in any case.

What happens if I deposit money in a PPF account that has gone into Option 3?

The deposit is treated as an irregular subscription. The bank or post office returns the credit, or parks it as a non-interest-bearing balance the subscriber must withdraw on demand. No 80C deduction is allowed even for old-regime subscribers.

Is the loan facility available during PPF extension blocks?

No. Loans against PPF are restricted to years 3 to 6 of the original 15-year tenor, repayable within 36 months. In all extension blocks only partial withdrawal is available, subject to the caps above.

Can NRIs extend a PPF account under either mode?

No. Rule 3(4) of PPF Scheme 2019 prohibits extension by a person who is non-resident on the maturity date. The account is treated as matured on the original date even if the subscriber became non-resident later, and interest accrues only at the post-office savings rate from that date until withdrawal.