Ppf account

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 March 2018 RESPECTED SIR,
A FATHER HAS OPENED 3 PPF ACCOUNT ,ONE IN HIS OWN NAME AND TWO IN THE NAME OF MINOR SON AND MINOR DAUGHTER.
DURING THE FINANCIAL YEAR 2017-18 HE HAS DEPOSITED RS. 150000.00 IN HIS OWN ACCOUNT AND RS. 50000.00 EACH IN HIS MINOR SON AND DAUGHTER ACCOUNT AGGREGATING TO RS.250000.00
SIR, WHAT ARE THE TAX INCIDENCE AND LEGAL CONSEQUENCES IN DOING SO.
PLEASE GUIDE ME

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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08 March 2018 Tax incidence in case of PPF accounts of minor children:

No tax incidence as the PPF investment is Exempt Exempt Exempt i.e It is tax free at the time of investment, at the time of interest getting accrued and at the time of maturity.

IT Deduction benefits: Assuming that the father is the guardian in both PPF accounts, the father can claim deduction of the contribution under 80C upto the maximum allowed limit of Rs.1.50 lacs per annum

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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08 March 2018 Legal consequences : I don't see any till the minor children attain majority. Upon majority,the children has to intimate the PPF authority that the account be self operated. The Accrued interest and Maturity amount of PPF will continue to be tax free

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