NRIs cannot open a new PPF account. But if you opened PPF while you were a resident of India, you can keep it running until it matures (15 years from the end of the financial year you opened it), contributing from your NRO account on a non-repatriation basis. What you generally cannot do as an NRI is extend it in 5-year blocks after maturity. The interest stays tax-free in India, but if you live in the US or UK it is usually taxable there every year.
This guide explains the rule and its history, contributions, loans and withdrawals, what happens at maturity, how the US and UK tax PPF, a worked example and a checklist. Rules are stated as of tax year 2026-27 (FY 2026-27).
The rule in one table
| Situation | Allowed? | Notes |
|---|---|---|
| NRI opens a new PPF account | No | PPF is only for resident individuals at the time of opening |
| Resident opens PPF, later becomes NRI | Yes, continue till maturity | Contributions on a non-repatriation basis, typically from NRO |
| NRI extends PPF after 15 years | No | Extension is for residents only; an extended NRI account earns 0% interest from 1 October 2024 |
| NRI closes PPF early | Yes, after 5 years | Change in residency is a permitted reason for premature closure, with an interest penalty |
| NRI opens PPF for a minor child | No | A new account, even as guardian, is not available to NRIs |
The history: why this confuses everyone
The original PPF Scheme, 1968 said an account opened by a resident could continue on a non-repatriation basis if the holder later became non-resident. In October 2017, the government notified an amendment that would have treated PPF accounts as closed on the day the holder became an NRI, with interest dropping to the post-office savings rate. After pushback, that notification was put in abeyance in early 2018 and was not implemented.
The PPF Scheme, 2019, which replaced the 1968 scheme, kept the principle that a resident who becomes non-resident during the account's term may continue subscribing till maturity on a non-repatriation basis. It also added "change in residency status" as a ground for premature closure after five years.
Then, in 2024, the Department of Economic Affairs issued guidelines on regularising irregular small-savings accounts, effective 1 October 2024. For NRIs, the account that counts as irregular is one that was extended beyond its 15-year maturity while the holder was an NRI: it earned only the Post Office Savings Account rate (4%) up to 30 September 2024, and no interest at all from 1 October 2024. An account you are simply holding until its original maturity is not affected and keeps earning the normal PPF rate. If you extended your account after moving abroad, close it and move the money rather than leaving it idle at 0%.
Contributions as an NRI
- Limit: minimum ₹500 and maximum ₹1.5 lakh per financial year, same as residents.
- Source: through your NRO account on a non-repatriation basis. Some banks accept a transfer from NRE, but the PPF balance remains non-repatriable either way.
- Inactive account: if you skip the ₹500 minimum in a year, the account becomes discontinued. Reviving it normally needs a penalty of ₹50 per missed year plus the arrears; check whether your bank will process this for an NRI.
- Interest rate: set by the government every quarter for small-savings schemes. It has been 7.1% for several years, but check the current rate on the National Savings Institute or your bank's website rather than assuming it.
Interest is calculated on the lowest balance between the 5th and the last day of each month and credited once a year on 31 March, so deposits made by the 5th of April earn interest for the full year.
Loans, partial withdrawals and premature closure
| Facility | When | How much |
|---|---|---|
| Loan | From the year after the year of opening until the end of the 5th year | Up to 25% of the balance at the end of the second year before the year you apply; interest is charged at 1% above the PPF rate |
| Partial withdrawal | From the 7th financial year (after 5 complete years), once a year | Up to 50% of the lower of the balance at the end of the 4th preceding year or the preceding year |
| Premature closure | After 5 complete financial years | Full balance, with interest reduced by 1% for the whole period; allowed for specified reasons including change in residency status |
As an NRI, withdrawals are credited to your NRO account. From there you can repatriate up to US$1 million per financial year, with Form 145 (formerly 15CA) and Form 146 (formerly 15CB). Our guide to repatriating money from India covers the paperwork.
What happens at maturity
PPF matures 15 full financial years after the end of the year of opening. An account opened in FY 2018-19 matures on 31 March 2034. At that point, as an NRI:
- You close the account and the proceeds go to your NRO account.
- You generally cannot extend it with or without contributions, which residents can do in 5-year blocks.
- If you have returned to India and are resident again by maturity, you can extend like any resident.
- The maturity amount is tax-free in India.
If you are planning a return, it may be worth checking your likely status in the maturity year with the residential status calculator, and thinking about where the money goes next. Our PPF maturity deployment roadmap covers the options. If you plan to retire in India, see how much you need to retire in India as an NRI.
Tax in India: still EEE
- Contribution: deductible under section 123 of the Income-tax Act, 2025 (formerly Section 80C) within the ₹1.5 lakh limit, but only under the old tax regime and only if you have taxable Indian income to deduct it from.
- Interest: exempt for NRIs as well as residents (formerly Section 10(11); see the note below on the 2025 Act).
- Maturity and withdrawals: exempt.
The new Income-tax Act, 2025 took effect on 1 April 2026 and renumbers provisions: the 80C deduction is now section 123, and the former 10(11) exemption has moved to the new Act's exemption schedules. The exemption itself has not been removed.
Tax where you live: the part NRIs miss
United States
For US citizens, green-card holders and US tax residents, PPF interest is generally taxable in the US each year as it is credited, even though India exempts it and you cannot touch the money. The US-India treaty does not exempt it. See our US-India DTAA guide for why a treaty does not rescue India-exempt income. Most advisors also report PPF on FBAR (FinCEN 114) and, above the thresholds, on Form 8938. A minority view treats PPF as a foreign trust with additional reporting; the IRS has not issued guidance specific to PPF. Because there is no Indian tax paid, there is no foreign tax credit to offset the US tax.
United Kingdom
UK residents are generally taxed on worldwide interest, so PPF interest credited each year is usually taxable in the UK. The remittance basis was replaced from April 2025 by a new regime that gives eligible new arrivals a four-year exemption on foreign income; check whether you qualify.
UAE and Singapore
The UAE has no personal income tax. Singapore generally does not tax foreign-sourced income received by individuals. For NRIs in these countries, PPF stays close to fully tax-free.
PPF vs NRE FD vs debt funds for an NRI
| PPF (existing account) | NRE fixed deposit | Indian debt mutual funds | |
|---|---|---|---|
| Can an NRI start one now? | No | Yes | Yes (some AMCs restrict US/Canada residents) |
| Return | Government-set, reset quarterly | Bank rate, fixed for the term | Market-linked |
| India tax on returns | Exempt | Exempt | Taxed at slab rate (for units bought after 1 April 2023) |
| Liquidity | Low (15-year lock, limited withdrawals) | Medium (penalty on early break) | High |
| Repatriable | No, only via NRO limit | Fully | Yes, if invested on repatriable basis |
| US tax | Interest taxable yearly | Interest taxable yearly | PFIC rules; often punitive |
| Best for | Letting an existing account run to maturity | Parking foreign savings in INR | Flexible INR debt allocation |
For a resident-focused comparison, see PPF vs FD. For US taxpayers, the PFIC tax calculator shows why Indian debt funds are rarely a good fit.
Worked example: continuing PPF after moving to the US
Arjun opened PPF in FY 2018-19 while working in Bengaluru and deposited ₹1.5 lakh at the start of every year. He moved to the US in mid-2024 and continued depositing ₹1.5 lakh a year from his NRO account. Assume 7.1% throughout (illustrative; the rate can change every quarter).
- Balance when he moved (end of year 7): about ₹13.9 lakh.
- Interest credited in year 10: about ₹1.48 lakh. At about ₹96 to the dollar (late September 2026), that is roughly US$1,540 of US-taxable interest. At a 24% federal bracket, about US$370 of US tax that year, with no Indian tax to credit against it.
- Maturity (31 March 2034): about ₹40.7 lakh on ₹22.5 lakh of deposits, tax-free in India, credited to NRO.
If Arjun lived in Dubai instead, the whole ₹18.2 lakh of interest would be tax-free. If he stopped contributing after moving, the balance would still earn interest till maturity, but he would need to deposit ₹500 a year to keep the account active. Model your own numbers with the PPF calculator.
Should you keep contributing, or close it?
- Keep contributing if you live in a zero or low-tax country, have fewer than about five years to maturity, and are comfortable with non-repatriable money in INR.
- Keep the account but contribute only ₹500 a year if you are a US or UK taxpayer and want to avoid adding more to an account that is taxed abroad but locked in India.
- Close it prematurely (after 5 years, using change of residency as the ground) if the foreign reporting burden and loss of liquidity outweigh the tax-free return. You lose 1% of interest for the whole period, so run the numbers first.
Common mistakes
- Not telling the bank you became an NRI. The account should be updated to non-resident status and linked to NRO.
- Trying to extend at maturity as an NRI. Expect the bank to refuse; plan where the money goes before 2034 (or whenever yours matures).
- Opening a PPF for a child as an NRI parent. Not allowed.
- Not reporting PPF interest in the US or UK because it is "tax-free in India".
- Missing FBAR or Form 8938 as a US person.
- Letting the account go inactive by skipping the ₹500 minimum.
- Claiming 80C under the new regime, or with no taxable Indian income.
NRI PPF checklist
- Confirm the account was opened while you were resident, and note the maturity date.
- Update residency status, overseas address and link your NRO account with the bank or post office.
- Ask in writing what interest rate your account is being credited with, given the 2024 guidelines.
- Decide whether to keep contributing ₹1.5 lakh, drop to ₹500, or close early.
- If you file an Indian return under the old regime, claim 80C for contributions.
- Report annual interest in your country of residence and list the account on FBAR/Form 8938 if you are a US person.
- Plan the maturity amount: reinvest in India, move to NRE-eligible options, or repatriate from NRO with Form 145/146.
The bottom line
PPF is one of the few Indian investments that remains fully tax-free in India for NRIs, but you only get to keep an account you already have, and only until it matures. For NRIs in the UAE or Singapore it is worth running to maturity. For US and UK taxpayers, the annual foreign tax and reporting often make it a hold-and-close rather than a keep-adding account. For a complete view of what to keep, close or move across India and abroad, visit our NRI planning hub. This article is educational; confirm your case with a CA or cross-border tax advisor before acting.
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