PPF is a fixture of Indian household savings -- a 15-year government-backed instrument with tax deduction on contribution, tax-free interest, and tax-free maturity proceeds, the classic exempt-exempt-exempt structure. The rules change the moment you become an NRI, but not in the way people usually assume. You are not required to close the account, and it doesn't stop earning interest just because you moved. What changes is what you're allowed to do with it going forward.
NRIs cannot open a new PPF account under any circumstances. But if you opened one while you were a resident and later became an NRI while the account was still running, the account continues until it reaches its original 15-year maturity -- it doesn't get force-closed the day your residency status changes.
Contributions are allowed -- extension is not
While the account is live, you can keep contributing as an NRI, subject to the same limits as any PPF account holder: a minimum of Rs 500 and a maximum of Rs 1.5 lakh per financial year, funded from an NRE, NRO or FCNR account. The interest rate is the same government-notified rate applied to all PPF accounts -- 7.1% per annum for the July-September 2026 quarter, unchanged for nine consecutive quarters as of the last small savings rate revision.
What you cannot do is extend the account beyond its original 15-year term. Resident account holders can roll a matured PPF account forward in blocks of five years, with or without further contributions, effectively for life. NRIs lose that option -- the account must be closed at the 15-year mark. This has been a settled rule for years, but enforcement was inconsistent, and a good number of NRIs extended their accounts anyway, sometimes because the extension form (Form H) simply didn't ask for residential status. A circular tightening this in late 2024 drew a hard line: PPF accounts irregularly extended by NRIs would earn only the post office savings account rate from the date of extension, and no interest at all after 30 September 2024, regardless of when the irregular extension happened. If you extended a PPF account after becoming an NRI, it's worth checking with your bank or post office whether your account falls into this bucket before you assume it's still earning full PPF interest.
Tax treatment: exempt in India, not necessarily where you live
In India, PPF interest and maturity proceeds remain fully exempt from tax regardless of your residency status -- this exemption, previously housed in Section 10(11) of the Income-tax Act, 1961, now sits within the restructured exempt-income framework under Section 11 and its schedules in the Income-tax Act, 2025. Indian residency status doesn't affect this; what matters is that PPF income has always been carved out of taxable income under domestic law.
The complication is on the other side of the border. The United States, in particular, does not recognise PPF as a qualifying retirement account, so a US-resident NRI's PPF interest is taxable annually as it accrues, at ordinary US income tax rates, even though nothing is credited to a bank account and nothing is taxed in India. Some tax preparers additionally treat a PPF account as a foreign trust for US reporting purposes given its statutory-scheme structure, which would layer Form 3520 and Form 3520-A obligations on top of the annual income inclusion -- this specific treatment is debated among practitioners rather than settled, so it's worth a conversation with a US cross-border tax preparer rather than assuming either way. Either way, don't treat 'tax-free in India' as the whole story if you file US taxes; it's only half of it, and it sits alongside the account's usual FBAR and FATCA reporting once balances cross the applicable thresholds.
Maturity, closure and getting the money out
At maturity, an NRI's PPF account must be closed -- there's no extension path available, and the proceeds are credited to your NRO account rather than paid out in cash or moved directly overseas. From the NRO account, you can repatriate up to USD 1 million per financial year under RBI's existing facility for NRO balances, subject to submitting Form 15CA (and Form 15CB from a chartered accountant where required) confirming the source of funds and that applicable taxes have been accounted for. Premature closure is technically available after five years from account opening for specified reasons (medical emergencies, higher education), with a 1% interest clawback applied retrospectively from account opening, but this route is narrower for NRIs and worth confirming directly with your bank given how inconsistently the irregular-extension crackdown has been applied across branches.