Run it to maturity, yes: extend it, no
The starting point is reassuring: a PPF account you opened legitimately while resident in India does not have to close the day your status changes. You can carry it all the way to its original fifteen-year maturity as a non-resident, with the interest accruing under the scheme's terms the whole time.
A few years ago there was real alarm about this. A 2017 notification suggested that a resident's PPF would be deemed closed from the day they became a non-resident, but that notification was placed in abeyance in 2018 and never took effect that way. So the position today is the practical one most NRIs assume: the account runs to its natural end.
What changes for a non-resident is the back end. A resident reaching maturity can roll the account forward in further five-year blocks, indefinitely. An NRI cannot take that extension, at maturity the account has to close and pay out. And an NRI cannot open a fresh PPF at all. So the plan is simple to state: let the existing account mature on its original date, then close it cleanly, rather than trying to keep it alive the way a resident would.
The maturity money is tax-free in India (Section 10(11))
PPF sits in the small band of investments where the interest is exempt as it accrues and the maturity proceeds are exempt when they are paid, both under Section 10(11). That exemption is not a resident-only perk. It applies to a non-resident holding the same account just as it applies to a resident, so the lump sum that lands when the account matures carries no Indian income tax.
| What you receive | Indian tax on it |
|---|---|
| PPF interest each year | Exempt (Section 10(11)) |
| Maturity proceeds (full balance) | Exempt (Section 10(11)) |
The one honest caveat sits outside India. Your country of residence may not recognise PPF's tax-free status the way India does. Some countries tax the interest as it accrues, or tax the maturity payout, because their own rules don't carve out an Indian small-savings scheme. That is a foreign-side question, settled with your tax preparer in your country of residence; it does not change the Indian answer, which is that the interest and the maturity proceeds are exempt here.
If nobody ever takes it out
Worth knowing because a PPF you cannot extend matures whether or not anyone is paying attention, and an account left sitting is a common outcome for someone who moved abroad years earlier.
Unclaimed balances do not stay with the institution indefinitely. Under the Senior Citizens' Welfare Fund Rules, unclaimed amounts in Public Provident Fund accounts are transferred to that Fund, and so are unclaimed balances in Employees' Provident Fund accounts and in the post-office schemes: Post Office Savings, Recurring Deposit, Time Deposit and Monthly Income accounts, the Senior Citizens' Savings Scheme, Kisan Vikas Patras (KVP), National Savings Certificates (NSC) and Sukanya Samriddhi. Institutions identify them once a year and transfer by 1 March.
The money is not lost at that point, but a clock does start. You have twenty-five years from the credit to the Fund to claim it, after which it escheats to the Central Government. That is the same deadline that applies to an unclaimed insurance policy, and it is genuinely different from a dormant bank account, where the claim never expires at all.
The period that makes a balance unclaimed in the first place differs between these schemes, so if you think one of yours is close, ask the institution holding it rather than assuming a single rule covers them all.
Getting the money out. The NRO route and the remittance forms
Maturity proceeds from a resident scheme like PPF are credited to your NRO account, not paid straight into an overseas account. From the NRO balance, the money is then repatriated abroad through the standard NRO route. The same USD 1 million-a-year facility that covers other NRO funds.
Because the proceeds are exempt under Section 10(11), there is no Indian tax sitting on this particular money to clear, but the bank still wants the remittance documented. For a repatriation of any size, that usually means a Form 15CA declaration from you and a Form 15CB certificate from a practising CA confirming the nature of the funds and that nothing is owed on them (these are being replaced by Form 145 and Form 146 from FY 2026-27, with the same purpose). The certificate is what lets the bank release the transfer without a hold.
The practical sequence is therefore: let the account mature and the proceeds land in your NRO account, document that the money is exempt PPF maturity, then file the remittance forms and send it out within your annual limit. Where you have other NRO funds queued for repatriation in the same year, the PPF proceeds share the same ceiling, so the timing is worth planning rather than leaving to the last week.
A worked example: a maturing PPF and a move to Australia
Meera opened a PPF account in Pune in 2014 and moved to Melbourne in 2020, becoming a non-resident. By 2029 the account is reaching its fifteen-year maturity, and she wants the money in her Australian account.
The account runs to its original 2029 maturity without a problem. She was not required to close it when she moved, and the interest kept accruing throughout. At maturity the full balance, say ₹38 lakh including all the accrued interest, pays out, and under Section 10(11) none of it is taxed in India. The proceeds are credited to her NRO account.
To bring the money to Australia, her CA documents that this is exempt PPF maturity, issues the Form 15CB certificate (Form 146 from FY 2026-27) confirming there is no Indian tax to deduct, and helps her file the Form 15CA, so the bank releases the repatriation within her annual limit. The one thing handled on the other side is whether Australia taxes any part of the PPF interest under its own rules. That is for her Australian preparer; the Indian position is simply that the maturity is exempt and the money is cleared to leave.