Deduction on ppf

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2014 HI,
PPF investment is 100% tax free.

I decide to make an investment in PPF for myself and my mother for Rs.100000 each annually.

As known i can claim tax exemption for my investment in PPF to the limit of Rs.100000 u/s 80C.

Can my mother claim deduction u/s 80C too even if she has low source of income, e.g she earns Rs.20000 annually?

The payment is made by me and not by my mother.

If not then will the investment of PPF in my mother's name will become taxable and to whom? If yes the what will be the tax rate?

Instead of my mother i decided to make investment in my child's name of Rs.100000.
Now he has no source of income. Will the complete investment be taxable to me?

Please provide your insight.

AVTAR SINGH

AVTAR SINGH (Expert)
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29 January 2014 All payments made by you will have to be out of your income or other sources. So you will have to explain where the income/amount is coming from.

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Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2014 Hi Avtar,

You mean to say that the PPF i open in my parents/children's name will be exempt from tax if i am able to explain the source of Income from were i am making the investment.

I am a bit confused over here.
Maximum deduction u/s 80C is Rs100000.
Then how can the PPF payment by me in my child's/parents name is exempt.

Who enjoys the benefit of exemption?

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AVTAR SINGH

AVTAR SINGH (Expert)
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29 January 2014 Deduction u/s 80C in respect of PPF is available for investment in Self/spouse/children accounts. The total deduction to you will not exceed Rs.100,000. Parents account are not eligible for deduction from your income.

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Querist : Anonymous

Querist : Anonymous (Querist)

30 January 2014 Hi Avtar,
Please explain is there any minimum age to open a PPF account?
Also will the usage of PPF amount after its maturity will decided its taxability.?
E.g-After maturity of my child's PPF i get Rs.1000000. Out of which i use Rs.6lacs for his educational purpose and the rest for i use it for house renovation. Will the 4lacs become taxable.

AVTAR SINGH

AVTAR SINGH (Expert)
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30 January 2014 Any adult in his / her name or in minor's name in the capacity of guardian of the minor can open PPF A/c. HUF and NRIs cannot open PPF account.

The amount received on maturity of PPF is not taxable at all. After receiving the amount if some income is earned after investing that amount, then that income only is taxable.

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