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PPF A/C contribution and exemption

viki (aa) (34 Points)

27 March 2010

Can someone help on PPF a/c distribution. As per my understanding PPF is open for individual and distribution is consider to be individual irrespective of Minor / HUF/ Self . and Max linit to invest is 70000/ year.

So if I invest 70000 in self PPF and 70000 in Minor. Will there be any problem. ? only thing that will be U/s 80c deduction allowed max is 70000/ year. also interest earned on both account are clubbed but will be consider tax free.

plese correct

Thanks

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3 Replies

Pankaj (Manager) (284 Points)
Replied 27 March 2010

Dear.....

1) As per U/s 64(1A) ,Interest on PPF investment ( Minor A/c ) will be included in the income of his / her father , mother or parents. Such income is expemt u/s 10 in the hand of father , mother or parents.

2) 80C : Max. limit for PPF is Rs 70000/-. Investment of Minor under PPF a/c( if paid by assessee) can be considered up to Rs 70000 only. But here He has allready invested Rs 70000/- under PPF A/C .

Ok........................ Please ref Note No 4 & 6 , Page No 631 para No 235.2 of Direct Tax of Dr Vinod Singhania

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viki (aa) (34 Points)
Replied 27 March 2010

Thanks. But still not clear

Will it be any issue if 70000 is invested in self PPF and 70000 invested in minor PPF , just leave apart issue of exemption limit for 80 c . I mean total 140000 invested in PPF (self+minor) but only 70000 will be allowed as exemption.

Viki