MATURITY IS NOT IN 15 YEARS

The maturity period of a PPF account is calculated from the end of the financial year in which the account was opened. For one, if you opened your PPF account on April 15, 2001, the account has completed 15 years but has not matured yet. The 15-year period would begin from the end of 2001-02 (March 31, 2002) and your account will mature on March 31, 2017.

TENURE CAN BE EXTENDED

After the account matures, you can either withdraw the money or extend the account tenure. If you wish to extend it, you have two options: continue with the account without further contributions or continue investing. If you continue investing, you have to submit an application for extending the account tenure for a block of five years. The application has to be submitted within a year from the maturity date. After five years, the account tenure can be further extended for another five years.

CONTINUING WITHOUT INVESTING

If you don't submit an application for tenure extension, the PPF account tenure automatically gets extended but you cannot make further contributions to it.The balance in the account will continue to earn interest, but you will no longer be required to invest the minimum `500 every year. Once this option of continuing without contribution has been selected, the subscriber cannot alter it.

WITHDRAWALS DURING EXTENSION

During the extension period, the withdrawal rules are more lenient. If the tenure has been extended without contribution, you can withdraw any amount, but just once a year. The balance will earn interest till it is withdrawn en tirely. If the tenure has been extended with contribution, you can withdraw up to 60% of the balance in the account at the beginning of each block of five years.

NO CHANGE IN TAXATION, OTHER RULES

Whether you extend the account ten ure with or without contribution, the tax treatment does not change. The interest earned is tax-free and contributions can be claimed as a deduction un der Section 80C. The rules for contributing to the extended account remain the same with a cap of `1.5 lakh in a financial year. The only change is that NRIs, who may have opened PPF accounts before the change in their residency status, are not allowed to extend the tenure .

ACCOUNT CAN BE FORECLOSED

This year on, investors can close their PPF accounts early, but only after it completes five years. The account can be closed if money is needed for higher education or medical treatment. But the investor gets 1% less interest on all preceding years. Hence, not a good option.

ACCOUNT CAN BE TRANSFERRED

You can also transfer PPF account to a bank or Post Office branch. Some banks such as ICICI Bank allow online operation of PPF accounts which makes it convenient, especially for senior citizens.