Total PPF investment limit including Spouse and Minor account

POSTED BY arffb12 ON March 10, 2013 11:59 pm COMMENTS (25)

Here are the facts about my PPF investment model. I have been investing a total of more than Rs. 100k p.a. in the PPF accounts of my wife, my son and my own. The SBI passbooks in all three show interests as per the prevailing rates. Though the investment per account is less than Rs. 100k, but the sum total is more. I have planned this way to generate money for kid’s education.

I really don’t understand why your site tells about the total limit to be upto Rs. 100k. I need you to clarify this point beyond any doubt so that several people like me get clarity about this kind of finacial planning.

If I had been committing mistake for last few years, when and how it will be rectified? What will be the implications for me or for the bank?

Tamaso ma jyotirgamaya.

Thanks

25 replies on this article “Total PPF investment limit including Spouse and Minor account”

  1. Thananjeyan Kandeeban T says:

    Dear Sir,
    I have the below question regarding PPF.

    My wife has a SBI savings account.(home maker , not earning and not filing returns)
    If I open a PPF account in my wife’s name athrough the SBI account and invest 1lakhs in my wife’s account… Can I claim tax benefit under section 80C for tax benefit while filing my returns?

  2. Hina says:

    Hi Ashal,

    I am working woman. Me and my husband both have PPF account. In 2017,tax free PPF limit is 100000 Rs per account.

    If my husband want to invest in my account and his account from his saving account then is it possible?
    and what is the limit of investment for him to invest in each account?
    and is that amount which is invested in two account is totally taxfree?

    Same as above, If I want to invest in my account and my husband account from my saving account then is it possible?
    and what is the limit of investment for me to invest in each account?
    and is that amount which is invested in two account is totally taxfree?

    1. Each account limit is 1.5 lacs .. The amounts will be tax free at maturity from both accounts ..

  3. bimal says:

    Hi!

    i have a PPF account in my name, in my wife’s name and in my daughter’s name ( daughter is a major-20 yer age). I also have a PPF of my minor son under my guardianship.

    fir availing maximum investment amount in PPF I plan to deposit 1.5 lacs each into my daughter’s/ wifes and minor son’s account. I plan to get 1.5 lacs deposited by my wife in my son’s PPF account ( minor under my guardianship). Please advise and oblige.

    Regards

  4. ashalanshu says:

    Dear Jain, you can open tyour kid’s PPF account but why do you want to disturb the compounding for wife’s account? Let it continue for a block of 5Y and renew each time.

    Interestingly if you are opening the PPF account for Kid under wife’s guardianship, you can invest 3L Rs. in total in all the 3 accounts.

    Here I want to ask you, why are you investing so much in PPF? 25K mly is not a small amount.

    Thanks

    Ashal

  5. jains says:

    I have two PPF accounts: myself I & wife. we are putting 100K in each of these to the limit.. Since my wife is non earning, has lesser tax liability, and her PPF term is about to end in next 2 years – I want to open PPF account in my kid’s name (age 8 years, will be adult by the time of withdrawal). This will provide me 15 years of investment option without any hassle of extending every 5 years.

    I still want to invest full 100K into my account, should I ensure that my wife opens kid’s account as guardian?

    Also confirm if this is the correct limits for the family:
    a) my PPF account, 100K every year until closure 15 years later
    b) my wife’s PPF account + kids PPF account, combined 100K every year until closure (will close wife’s PPF in next 3 years, and then invest 100K exclusively in kids PPF)

  6. ashalanshu says:

    Dear Newboss, Yes, she can avail Tax benefit but I w’d prefer that you invest in your kid’s account and claim benefit on it and your wife invest in your account and claim benefit on it.

    Thanks

    Ashal

  7. newboss says:

    dear Ashal Jauhari
    One more point bothering me . . that i wanted to clarify
    if i have two accounts 1)in my name 2)in minor child’s name (my self as guardian)
    now if i am investing in my account then can my wife (working) invest in my child’s ppf account whose guardian is father ?? is their any tax benefits available to my wife ?
    thanks . .

  8. ashalanshu says:

    Dear Mustafizur, how ‘ll you answer the taxman’s questions later on if your wife’s case or your own case comes under scrutiny? A gift deed ‘ll save you people from all these questions at that time. 🙂

    Thanks

    Ashal

  9. Mustafizur Rahaman says:

    Dear Ashal,

    Can you please elaborate a bit why one needs to do this gift deed?If I transfer 1L from my a/c directly to my wife’s ppf, is there any tax implications?

  10. Dear Ramprakash, to be on safer side, please prepare a gift deed In transfer your amount to her SB acct. & from there she should invest into her PF acct. As the resultant income ‘ll be tax free from PPF, the clubbing provisons of Section 64, ‘ll be meaningless in this proposed manner.

    thanks

    Ashal

  11. Dear Sandhu, if you are having your own PPF acct. as well as ne more PPF acct. as guardian for your kid, the limit is not 2L for 2 accts. , it’s actually 1L Rs. combined limit for this given situation. Now if you are depositing 1L Rs. full into your kid’s acct. you can not invest a single penny in to your own acct. as the limit of 1L rs. has been reached. Now for your spouse’s acct. you may invest another 1L Rs. Now in return your spouse may deposit 1L Rs. into your acct.

    This is the actual working model for PPF to invest more than 1L Rs. limit if there are 2 accounts for you, one self & one guardianship.

    If you are still in doubt, please do not go by my words. Read PPF rule book.

    Thanks

    Ashal

    1. Ramprakash says:

      Hi Ashal
      I have just opened a PPF account with INR 500 for my wife who is a homemaker and has no income. Coming April, I intend to deposit 1 lac in her PPF account.
      Should I directly transfer 1 lac from my saving account to her PPF account OR
      Should I directly transfer 1 lac from my saving account to her Savings Account and from there to her PPF account ?
      Is there any difference in the above two steps from taxation perspective.
      I understand that interest earned in PPF would be tax free irrespective of everything. I ask the above question to understand that the 1 lac being deposited by me in her PPF Account will be a Gift or Loan or it does not matter because it is being invested in Taxfree PPF?

      Thanks
      Ramprakash

      1. ashalanshu says:

        Dear Ramprakash, as the PPF account in question is of your wife, you can invest in total 2L Rs. (1L each in self & wife). You can directly transfer to her PPF account from your SB account. You can prepare a gift deed for this 1L Rs. her PPF deposit.

        Thanks

        Ashal

    2. Jwalant says:

      Dear Ashal,
      I had similar query for above reply.
      if i invest in my child PPF account 1L as guardian.
      I will inevest 1 L in my wife PPF account.
      My wife will invest 1L in my PPF account.
      My questions are as below.
      1.whether i or will get 2 L benefit for PPF account? If not then i will get interest in all 3 PPF accounts.& it will be taxfree. correct me if my understanding is wrong.
      2.I had second query is that for any service person EPF & PPF combine limit will be 1 L?
      3.If we invest in Child PPF account & after 15 years we will get X ammount.whthere that X ammount will be used for inevest purpose by me than whthere any taxes will be applied or i need to reinvest in name of my child?

      1. ashalanshu says:

        Dear Jwalant, as you are the guardian of your child’s PPF account, the combined limit for your account + child is 1L Rs. only. Now the way, you are planning, Yes it’s possible to deposit 1L in each account, your kid & your wife & in return, your wife ‘ll deposit into your account.

        You may claim tax benefit on your 1L Rs. deposited into Kid’s account & She can claim on her amount into your PPF account.

        PPF itself has 1L Rs. limit. EPF has no relation with PPF. EPF limit is defined as the %age from the Basic & DA of your salary.

        What ‘ll be the age of kid in question after 15Y. if the kid is still minor, the amount invested by you from PPF redemption ‘ll be taxable for you. My personal take ‘l be to let it continue.

        Thanks

        Ashal

    3. mitul19 says:

      Hi Ashal ,

      In your reply if i go with your suggestion then I can get the tax exemption of 1.5 L as i have invested to my child’s acc and my wife will have her own 1.5 L exemption as she had put the money which i transferred to her acc . So over all total exemption is 3L and not 4.5 L ..rt ?

      Second –> I transfer 1.5 L in my acc and then transfer 3L in my wife’s account . She deposits 1.5L in her ppf acc and 1.5 in child ppf acc (considering she is her guardian) will this work ? Yes here also the max tax exempting would be 3L (joint by me and my wife ) … am i correct ?

      Thanks ,
      Mitul

  12. sandhu b says:

    what is the logic and what are regulations supporting this logic. AT THE OUTSET I DO NOT AGREE !!!!!

  13. Dear arffb12, there is a way out. Please deposit 1L Rs. into your son’s account & another 1L Rs. into your wife’s account. Ask your wife to deposit full 1L Rs. into your own account.

    Thanks

    Ashal

  14. Dear Arffb12, you mean to say you are investing nearly 2.1L Rs. in all the 3 accounts of PPF taken together. Well, good luck all I can say. the moment, SBI ‘ll come to know it’s mistake, you ‘ll lose the interest in one account either your own or your son’s. PPF rulebook is very clear to it no matter what you are getting in actual from SBI as on date.

    Thanks

    Ashal

    1. arffb12 says:

      Dear Ashal,
      Thanks again.
      Today I met manager of the branch of bank (State Bank of India) where I have all these three accounts. I narrated the whole scenario. He does not see any problem with the situation. I am really confused as to continue this mode of financial plan or to change it in the light of your clarification regarding the total ppf investment limit.
      I do not want to become a tax evader, and at the same time I do not want to receive a bigger shock (as I am already shocked about the money I have put till now) later regarding no interest earned for the money being deposited in minor.
      Hope you can provide more insight on this issue. What is the fate of money deposited till now? The passbooks already show interests in all three accounts (wife, son, self). I want to deal with the matter with full transparency.

      Thanks

  15. Dear Arffb12, who is the guardian of minor PPF account? FYI – You can deposit full 1L Rs. in your wife’s account even though you have already exhausted your own 1l Rs. limit. what’s the actual amount you are investing in? Please share actual details.

    Thanks

    Ashal

    1. arffb12 says:

      Dear Ashal,

      Thanks for quick response.
      I am the guardian for PPF account for my son.
      Investments have been 70K(+) in each of the accounts.

      Thanks

      AR

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