PPF can be extended indefinitely in blocks of 5 years by submitting Form H. Submitting form H is required if you wish to continue investing upto 1.5L max every year and earn interest on that.
Without submitting Form H to extend PPF tenure in blocks of 5 years, you can continue the PPF account as is and you can still credit money to the account but interest will be earned only on up to 15 years contribution.
After completing 15 years, you can withdraw upto 60% of the PPF balance. One withdrawal per year is allowed as per year 2020 changes in the rules. Form C is needed for this.
But if you had not submitted Form H to extend PPF your money can keep on earning interest without any obligation to invest every year and you can withdraw any amount anytime.
The best part of PPF is EEE status for taxation. And risk-free tax-free compounding. If one is a salaried employee, he may choose to rather make voluntary contribution in EPF which earns a little more interest than PPF.
My view is if one starts a PPF account early in life, say you do it for your kid, by the time he becomes an adult, a tax-free corpus would be ready. For a girl child, Sukanya Samridhhi Scheme earns a little more interest and still enjoys the EEE in taxation. Think of these as Tax-free alternate to Debt Mutual Funds. If you invest in these govt schemes, you need not invest in any Debt Mutual Fund.
My thumb rule would be - for tax-saving purpose, calculate your life insurance premium, EPF contribution and top up with Voluntary contribution to EPF to reach 1.5 lakh total annual investment under section 80C. If not a salaried person, invest in PPF (if account was opened early in age so you are extending in 5 years block) to fulfill total 1.5L deficit.
If both the above conditions don’t fulfill, then only choose ELSS fund only to fulfill 1.5L deficit under section 80C. There too look for lower TER because effective TER for 3 years becomes an expensive affair. Quantum ELSS Fund’s TER is 1.29% which makes it 1.29 x 3 = 3.87% total for the 3-year lock-in period.
Hoping, Zerodha AMC brings in Nifty 50 based ELSS fund and tax-saving ETF in 2021 which would be quite cost effective and yet give better results than all the actively managed ELSS funds.