NRI PPF Rules: What Happens to Your PPF After Moving to the US (2026)

Last updated: June 2026 · 10 min read · NRI Finance

You spent years building your PPF balance in India. Then you moved to the US on an H1B or L1 visa — and suddenly nobody can give you a straight answer about what happens to it. Can you still contribute? Does the interest stay tax-free? What happens when the account matures? This guide answers every NRI PPF question clearly.

The Basic Rule: NRIs Cannot Open New PPF Accounts

As of 2024, the Indian government does not allow NRIs to open a new PPF account. If you try to open one after becoming an NRI, your bank or post office will reject the application once they verify your NRI status.

However, if you already had a PPF account before becoming an NRI, different rules apply — and this is where it gets important.

What Happens to an Existing PPF Account When You Become an NRI?

Under the Public Provident Fund Scheme 2019, if you had a PPF account as a resident Indian and then became an NRI:

• Your account continues to earn interest at the prevailing PPF rate
• You cannot make fresh contributions after becoming an NRI (amended rules from 2018)
• The account will earn interest on the existing balance until it matures
• At maturity, you can withdraw the full amount and repatriate it through your NRO account
• You cannot extend the account beyond maturity once you are an NRI

Timeline: What to Do With Your PPF Based on When You Left India

US Tax Treatment of PPF: The Big Problem

This is where many NRIs living in the US get caught off guard. PPF interest is tax-free in India. But if you are a US tax resident (on H1B, Green Card, or US citizen), you must report your worldwide income to the IRS — including PPF interest.

Is PPF interest taxable in the US?

The IRS does not recognise PPF as a qualified pension plan. This means:

• The annual interest credited to your PPF is taxable as ordinary income in the US, even though you cannot withdraw it yet
• You must report it on your US tax return every year
• The India-US Double Taxation Avoidance Agreement (DTAA) does not specifically exempt PPF interest from US taxation

Does India tax the PPF interest for NRIs?

No. India continues to treat PPF interest as tax-exempt regardless of your residency status. The Indian side is clean — the US side is where you need to be careful.

EPF vs PPF for NRIs: A Different Story

Many NRIs also have Employee Provident Fund (EPF) balances from their Indian employment. EPF rules for NRIs differ from PPF:

• EPF balance continues to earn interest for 3 years after leaving employment
• After 3 years of no contribution, the account becomes dormant and stops earning interest (as of 2023 rules)
• You can withdraw your EPF balance after 2 months of unemployment — many NRIs do this before leaving India
• EPF interest is taxable in the US the same way as PPF

What to Do: Practical Action Plan for NRIs with PPF

1. Stop contributing immediately once you become an NRI — do not make fresh deposits
2. Inform your bank of your NRI status and update your KYC
3. Check your maturity date — calculate how much the existing balance will grow to using the PPF Calculator
4. Report the interest annually to the IRS on Schedule B of your US tax return
5. File FBAR if your PPF balance crosses the $10,000 threshold
6. At maturity: credit the amount to your NRO account, then repatriate up to $1 million per year after paying applicable Indian tax (if any)

Frequently Asked Questions