A worked example: ₹8,00,000 and ₹5,00,000
With a balance of ₹8,00,000 at the end of the immediately preceding financial year and ₹5,00,000 at the end of the 4th preceding year, the lower of the two is ₹5,00,000 — so the maximum withdrawal allowed is 50% of that, ₹2,50,000.
The formula: 50% of the lower balance
Max withdrawal = 50% × min(balance at end of immediately preceding year, balance at end of 4th preceding year). Whichever of the two balances is smaller sets the cap — a large recent balance doesn't help if the account was much smaller four years earlier.
When the more recent balance is the lower one instead
Flip the numbers — ₹4,50,000 at the end of the immediately preceding year and ₹5,00,000 four years earlier — and the cap becomes 50% of ₹4,50,000, or ₹2,25,000. The rule always takes whichever balance is smaller, regardless of which year it came from.
Why the rule looks back four years, not just one
Using only the most recent year's balance would let someone deposit a large lump sum and immediately withdraw half of it. Requiring the lower of two balances four years apart means a large sum has to have been in the account for years before it meaningfully raises the withdrawal cap.
What this calculator doesn't check
Partial withdrawals are only permitted from the 7th financial year onward (after completing 6 full financial years) and just once per year — this calculator computes the rupee cap only, from whatever two balances are entered, and doesn't verify eligibility for the current year.