POSTED BY July 28, 2012 2:45 pm COMMENTS (17)ON
Can i invest 1 L in self PPF account 50000 in wife’s ppf account. I donot want tax benefit. Just the investment part.
In a similar vein, can my father invest in my son’s PPF account for tax benefit.
Please le me know
Thanks in advance.
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17 replies on this article “Can i invest more than 1 lakh in PPF.”
Dear Anshul, GrandFather can not claim tax benefit on money invested in GrandSon’s PPF account. So you can claim for your son’s PPF account within the over all limit of 1L Rs. for section 80C.
AFAIK, one can deposit up to 1 lakh in each PPF account and earn tax free interest but benefit under section 80C is available up to 1 lakh only.
My question for others –
If my father deposits some amount in my son’s PPF account, who can claim tax benefit under 80C ? Will it be me or my father ?
Notes from STate Bank of Travancore Website
5) An individual can open a Public Provident Fund Account in his own name. He can also open an additional account on behalf of a minor of whom he is guardian. He can subscribe any amount in multiples of Rs. 5/- of not less than Rs.500/- and not more than Rs.1,00,000/- in a year in each of his account. A year for the purpose of the Scheme means a financial year (1st April to 31st March). The deposits in excess of Rs. 1,00,000 made during a year will not carry any interest and will not be eligible for rebate.
One of the conditions says “The deposits in excess of Rs. 1,00,000 made during a year will not carry any interest and will not be eligible for rebate.”
I understand that the limit under 80CC is 1L and hence any deposit above 1L is not eligible for rebate.
But how about the first part of the statement ? If I have my PPF account and one for my kid and invest 1L in each account will I get interest only on one account or on both ?
Ajay – I opened a PPF account two days back @ ICICI and i was verbally assured that for each account the interest will be accrued with the condition of max ceiling of 1L per account.
But – I am yet to find the same in writing!
Hi Ajay, it also says , that the ceiling is max 1 lac for both the account
Here is the fact:
One CANNOT invest more than 1 lakh in a single PPF account.
This was possible in the olden days when there were no computers and everything was done manually. But now there is a software and it does not allow more than 1 lakh in a single PPF account. So the question what happens to amount more than 1 lakh never arises.
Correction: you can deposit more than 1L, but any amount in exces will not earn any interest and will not be liable for tax deduction (thus maximum you can “invest” is 1L only
Thank you all for the replies.
Got clarity on the issue from your replies.
No, you can multiple accounts ( 1 in your name and additional in the name of your minor children), but the total contribution to all accounts together cannot exceed 1L rs.
Dear ap, a practical solution for the given situation –
Your father should invest 1L Rs. in your PPF account (His son) to get tax benefit.
You should invest 1L in your son’s & another 1L in your wife’s account to get maximum investment & taxation benefit.
Dear AP, in my suggestion, the maximum amount available for tax benefit ‘ll be 1L Rs. only be it from your son’s account or wife’s account.
We can have a second ppf account only if its coupled with a minor(son/Daughter).
A-Grandfather B-Son C-Grandson
Also A can open a account with his C provided in the absence of B.
so in the example B is not a minor so Definitely A and B cannot be coupled for a joint PPF account.
Am i mising something here?
Dear Sethu, B is not minor but son/D’ter of A, hence A being father of B, can avail tax benefit on the amount deposited in PPF account of B.
I dont think thats correct . A person can invest in his and wife PPF account fully , only in case of minors it cant cross 1 lacs .
Any amount invested above Rs. 100,000 will not earn any interest and not be eligible for deduction u/s 80C
Your father can invest on your son’s behalf if he is a minor and claim the tax deduction.