Can NRIs continue contributing to PPF accounts after becoming NRI?

Yes, if the PPF account was opened during resident status, NRIs can continue contributions until the account matures (15 years). However, they cannot extend the account beyond maturity.

Can NRIs withdraw partially from their PPF accounts?

Partial withdrawals are allowed after the 7th year of account opening under certain conditions, similar to resident rules. Loans are also possible from the 3rd year.

Is the interest earned on PPF taxable for NRIs?

The interest earned on PPF is fully tax-free in India. However, the maturity proceeds credited to the NRO account may be subject to applicable taxes as per Indian laws.

PPF for NRI

The Public Provident Fund (PPF) is a favored long-term investment scheme in India known for its safety, guaranteed returns, and tax benefits. However, NRIs cannot open new PPF accounts. Those who opened PPF accounts while residents can continue investing until maturity, but cannot extend beyond 15 years. Understanding these rules is essential for NRIs to manage their existing PPF investments effectively and stay compliant with regulations.

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PPF Calculator for NRI

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Can NRIs Open a PPF Account?

No, NRIs cannot open a new Public Provident Fund (PPF) account in India. The current regulations clearly state that only resident Indians are eligible to open PPF accounts. However, if a person opened a PPF account while they were a resident Indian and later became an NRI, they are allowed to continue maintaining and contributing to that existing account until it matures, which is typically after 15 years. Once the account matures, NRIs must close it, as they are not allowed to extend it.

PPF Account Extensions for NRIs

Resident Indians can extend their PPF indefinitely in 5-year blocks. However, NRIs lose this privilege. If they became NRIs after extending their PPF account, they may continue contributing until the new maturity date, after which closure is compulsory.

Example:

A resident extends their PPF at the 15-year mark for another 5 years.
During the second year of extension, they become an NRI.
They can continue for the remaining 3 years, but after maturity, no further extension is allowed.

PPF Withdrawals for NRIs

There are two types of withdrawals from PPF account for NRIs:

Partial withdrawals: Permitted after completing 6 years of account tenure and before maturity. NRIs can also use this facility.
Full withdrawal: Only possible upon maturity.

The withdrawal proceeds are credited to the NRI’s NRO account. While partial withdrawals cannot be repatriated abroad, maturity proceeds can be repatriated (subject to RBI rules).

Additionally:

Loans against PPF for NRIs are available from the 3rd year of account tenure.

PPF for NRI and Taxation

Interest earned on PPF remains tax-free in India under Section 10(11) of the Income Tax Act.
On maturity, the full amount must be withdrawn and the account closed.
The maturity proceeds are credited to the NRO account. NRIs may have to comply with taxation rules applicable to the NRO account and possible tax implications in their country of residence.

Can NRIs Hold a PPF Account in India?

Yes, but only if:

The account was opened while the person was a resident Indian.
It can be maintained only until maturity.
No fresh extension or new opening is allowed once NRI status is acquired.

Alternatives to PPF for NRIs

Since NRIs have restrictions with PPF, several other options are available for long-term investment in India:

NRE, NRO and FCNR Fixed Deposits – Safe and stable fixed deposits with different currency and repatriation features.
Direct Equity – Investments in Indian stock markets through DEMAT and Portfolio Investment Schemes.
Mutual Funds – Debt, hybrid, or equity mutual funds open through NRE/NRO accounts.
Real Estate – A popular asset class offering appreciation potential.
National Pension System (NPS) – NPS is a long-term retirement vehicle with equity and debt exposure plus tax benefits.
ULIPs – ULIPs are a combination of investment and insurance.
Government Securities and Bonds – Safe investment instruments backed by the Government of India.

Conclusion

Although NRIs cannot open or extend PPF accounts, they can maintain existing ones till maturity while complying with regulatory norms. For NRIs seeking safe, tax-efficient investment options, understanding PPF rules is essential. With alternatives like ULIPs, fixed deposits, mutual funds, and National Pension Schemes available, NRIs can find investment solutions suited to their financial goals beyond the limitations of PPF.

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FAQs

Can NRIs continue contributing to PPF accounts after becoming NRI?

Yes, if the PPF account was opened during resident status, NRIs can continue contributions until the account matures (15 years). However, they cannot extend the account beyond maturity.
Can NRIs withdraw partially from their PPF accounts?

Partial withdrawals are allowed after the 7th year of account opening under certain conditions, similar to resident rules. Loans are also possible from the 3rd year.
Is the interest earned on PPF taxable for NRIs?

The interest earned on PPF is fully tax-free in India. However, the maturity proceeds credited to the NRO account may be subject to applicable taxes as per Indian laws.

˜The insurers/plans mentioned are arranged in order of highest to lowest first year premium (sum of individual single premium and individual non-single premium) offered by Policybazaar’s insurer partners offering life insurance investment plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Past 10 Years' annualised returns as on 01-10-2025

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).