The Public Provident Fund (PPF) account is a 15-year investment product in which the investor makes contributions each year according to the specified limits. The account matures after 15 years from the end of the year in which the initial subscription was made.
On maturity, the investors have the option of extending the account for blocks of five years each. The extended account will continue to earn interest at the rate notified each year. The flexibility to withdraw funds from the account after it is extended is much more than in the initial subscription period.
The investor can choose to extend the PPF with additional contributions or without fresh contributions. The rules for contribution to the extended account remain the same as during the 15-year period. Once the choice is made for a block of five years, it cannot be changed.
The investor has to submit Form H at the post office or bank where the account is held if he intends to continue with the subscription. The form is available at http://www.indiapost.gov.in/pdfForms/PPFContinuation.pdf
The choice to extend the PPF account with subscription has to be made within one year from the maturity of the account. If this is not done, then by default the account is deemed to have been extended without further contribution for a period of five years.
Points to note:
The interest earned during the extended period of the PPF continues to be tax-free. There is no limit prescribed for the number of extensions of five years that are allowed for an account. The benefit of extension is not available to the NRIs who open the account before a change in their residency status.
Source:-The Economic Times