POSTED BY April 21, 2014 2:11 pm COMMENTS (3)
ONHi,
We know that under PPF rules, an individual cannot contribute more than Rs 1 lakh to his PPF account, including the account of a minor child of whom he is the guardian. However, what happens when the minor child attains majority?
1. Do PPF rules allow the individual to contribute 1 lakh to his major child’s account (or a combination of Rs 1 lakh in both his and major child’s account)?
2. Do Income Tax rules allow the depositor (parent) to claim the entire Rs 1 lakh so contributed as a deduction under income tax rules?
3. Lastly, if the parent cannot claim the portion contributed to his major child’s account, can the child claim the tax deduction for amount deposited by the parent in his/her account?
The essence of all 3 queries above is whether PPF rules allow any person (say a parent) apart from the account holder to deposit money in a major account holder’s account.
Regards,
Paresh
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Dear Paresh, my pleasure.
Thanks
Ashal
Dear Ashal,
Thanks for your answer, its very much appreciated
Regards, Paresh
Dear Paresh, one can invest in child’s PPF account even after child attains majority. Tax benefit is limited to 1L Rs. for combined 2 accounts of father and child. The investment limit ‘ll be 1+1 = 2L Rs. in this case. if the child in question wants to claim tax benefit on PPF, father should gift the amount first into child’s SB account and then the child should deposit it into PPF account from own SB account.
Thanks
Ashal