Public Provident Fund (PPF): Interest Rate, Investment Rules, Tax Benefits and Protection from Court Attachment
The Public Provident Fund (PPF) is a government-backed long-term savings scheme offering tax advantages, annual compounding and statutory protection against attachment of account balances for ordinary debts. The applicable framework is the Public Provident Fund Scheme, 2019, read with the Government Savings Promotion Act, 1873 and relevant rules.
Key PPF features in 2026
| Governing scheme | Public Provident Fund Scheme, 2019, as amended |
|---|---|
| Eligible account holder | Resident individual; guardian may open for a minor or eligible person under guardianship, subject to scheme rules |
| Minimum deposit | Rs. 500 per financial year |
| Maximum deposit | Rs. 1,50,000 per financial year, including deposits in qualifying guardian-operated minor accounts |
| Interest | 7.1% annually for October-December 2026; rate reviewed quarterly |
| Normal maturity | 15 years from the end of the opening financial year |
| Extensions | Five-year blocks, with or without further deposits as permitted |
| Tax benefit | Eligible deduction under applicable tax provisions in the old regime; interest and qualifying withdrawals generally exempt |
Legal framework and definitions
The Public Provident Fund Scheme, 2019 (official scheme text) replaced the older PPF scheme. Paragraph 2 defines an account as an account opened under the scheme, an account holder as the individual in whose name it stands, and a year as the financial year. The scheme operates under section 3A of the Government Savings Promotion Act, 1873 and alongside the Government Savings Promotion General Rules, 2018.
Who can open a PPF account?
Under paragraph 3, an eligible individual may open an account in their own name. A guardian may also open one account on behalf of each eligible minor or person of unsound mind, subject to prescribed conditions. Joint PPF accounts are not permitted. Non-resident and residency-change cases are subject to the applicable government savings rules and account-opening restrictions.
Minimum deposit, maximum investment and discontinued accounts
Paragraphs 4 and 5 prescribe a minimum annual subscription of Rs. 500 and a maximum of Rs. 1,50,000. Deposits are made in multiples of Rs. 50, and the overall ceiling includes relevant contributions to accounts maintained for minors. The earlier Rs. 1,00,000 ceiling and twelve-installment restriction are outdated.
If the minimum annual contribution is missed, the account becomes discontinued. It may ordinarily be revived before maturity by paying Rs. 500 for each defaulted year together with the prescribed Rs. 50 default fee per year, subject to the scheme conditions. A discontinued account continues to earn applicable interest, but its loan and withdrawal facilities may be restricted until revival.
PPF interest rate and calculation
The applicable interest rate is 7.1% per annum for the quarter 1 October to 31 December 2026. Rates are announced by the Ministry of Finance and may change for subsequent quarters. Interest is calculated on the lowest account balance between the close of the fifth day and the end of each calendar month and is credited at the end of the financial year. Depositing on or before the fifth day of a month can therefore help maximise that month's interest.
For current government notifications, consult the Department of Economic Affairs small savings notifications and the National Savings Institute.
PPF tax benefits and income-tax treatment
PPF deposits may qualify for deduction up to the applicable combined limit of Rs. 1,50,000 under section 80C of the Income-tax Act, 1961 for relevant earlier assessment years and the corresponding deduction provisions of the Income-tax Act, 2025 for tax year 2026-27 onwards, where the taxpayer uses the eligible old tax regime. The deduction is not generally available under the default new tax regime. PPF interest and eligible maturity proceeds are generally exempt from income tax under the applicable exemption provisions.
India's Wealth-tax Act regime has been abolished with effect from assessment year 2016-17; therefore, a separate claim of present-day PPF exemption from wealth tax is no longer necessary.
PPF maturity and five-year extension
Under the scheme, an account matures after 15 years from the end of the financial year of opening. The subscriber may withdraw the eligible balance or continue the account in five-year blocks. Extension with fresh subscriptions requires the prescribed option within the stipulated period after maturity. Extension without fresh deposits is also permitted; different withdrawal limits apply depending on the option selected.
Loans from a PPF account
Under paragraph 10, an eligible subscriber may apply for a loan from the third financial year through the sixth financial year counted from the opening year, subject to scheme conditions. The maximum is generally 25% of the balance at the end of the second financial year immediately preceding the application year.
The principal must be repaid within 36 months. For loans governed by the 2019 Scheme, interest is ordinarily charged at 1% per annum above the PPF interest rate applicable under the prescribed calculation if repaid within the stipulated period; a higher rate applies in case of delayed repayment. Earlier references to a flat 2% or 6% rate should not be used without checking the loan's governing terms. Further loans are subject to repayment of the earlier loan and the applicable eligibility window.
Loan from a minor's account
A guardian seeking a loan from an eligible minor's account must make the prescribed declaration that the money is required for the minor's use and benefit.
Partial withdrawals before maturity
Paragraph 11 permits one partial withdrawal per financial year after five years have elapsed from the end of the financial year in which the account was opened, subject to prescribed limits. The permissible amount is generally up to 50% of the balance at the end of the fourth year immediately preceding the withdrawal year or the balance at the end of the immediately preceding year, whichever is lower, after applicable adjustments.
For a minor's account, the guardian must establish that the withdrawal is for the use and benefit of the minor. During an extension with deposits, total withdrawals over a five-year block are ordinarily restricted to 60% of the balance at the commencement of that block, subject to the scheme rules.
Premature closure of a PPF account
Premature closure is not confined to death. Under paragraph 13, an account may be prematurely closed after five years from the end of the opening financial year on specified grounds, including treatment of serious or life-threatening illness of the account holder or eligible family members, higher education of the account holder or dependent children, and qualifying changes in residency status. Supporting documents are required. The interest payable on such premature closure is recalculated at a rate one percentage point lower than the rates applicable from time to time. On death, the account is closed and the nominee or legal heir may claim proceeds under the applicable procedure; the nominee cannot continue the deceased subscriber's account by making fresh deposits.
Transfer of PPF account
PPF accounts may be transferred between authorised banks and post offices under the applicable transfer process without changing the original maturity date. An account cannot ordinarily be transferred into another person's ownership. Account holders should request transfer through their existing account office.
Can a PPF account be attached by a court decree?
Generally, no. Section 14 of the Government Savings Promotion Act, 1873 protects money standing to the credit of an account under a government savings scheme from attachment under a decree or order of a court in respect of a debt or liability incurred by the account holder, subject to the precise statutory language and applicable law.
This protection is not a blanket immunity against every statutory recovery process. Tax recovery, government dues, amounts already withdrawn, and other special legal circumstances may require separate analysis. The Supreme Court has also distinguished protection of a PPF balance against ordinary creditors from statutory claims in appropriate cases. Subscribers should not assume that a PPF account can never be reached by any lawful authority.
For the controlling text, refer to the India Code portal and search for the Government Savings Promotion Act, 1873, particularly section 14.
Official references
- Public Provident Fund Scheme, 2019 - National Savings Institute (PDF)
- Ministry of Finance - Small Savings interest rate notifications
- India Post - Post Office savings services
- Income Tax Department - official tax information
- India Code - central legislation
This article provides general information based on the legal framework and interest-rate announcements available on 9 October 2026. Account-specific eligibility, taxation and recovery questions depend on current notifications and individual facts.