What Happens to Your PPF Account Upon Maturity If You Are an NRI?

For Non-Resident Indians (NRIs), the maturity of a Public Provident Fund (PPF) account involves specific rules and tax considerations. Here’s a quick guide to help you understand the process:

1. Mandatory Closure of PPF Account

NRIs must close their PPF account upon maturity as extensions beyond the 15-year term are not allowed. The account cannot be extended once it matures.

2. Tax Implications in India

The proceeds from a PPF account—both principal and interest—are tax-exempt in India. This means NRIs do not pay tax on the maturity amount in India.

3. Tax Implications in Country of Residence

NRIs should check the tax treatment of the PPF maturity proceeds in their country of residence, as some countries tax global income. Consult a tax expert to understand any applicable tax obligations.

4. Double Taxation Avoidance Agreement (DTAA)

India has DTAAs with several countries, which may help avoid double taxation on PPF income. If applicable, these agreements can reduce or eliminate the tax burden in the country of residence.

5. Repatriation of Funds

NRIs can repatriate the maturity amount abroad, subject to RBI regulations and limits. Ensure compliance with repatriation rules for a smooth transfer.

Key Takeaways:

• Mandatory Closure of PPF account upon maturity.

• Tax-Free in India but check tax rules in your country of residence.

• Repatriation is allowed with RBI compliance.