PPF in the name of Minors

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pritam (Querist)
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10 April 2011 Sir, I am having Two kids of age 3 to 8 years. I had opened PPF accounts in their name. Can I deposit 70,000/- to one of my kids account from my HUF account & can take 80CC benefit in my HUF file. Can my father can make gift to another Kids of Rs. 70,000/- & deposit its cheque to his PPF account without taking 80cc benefit. I want to know Weather it can not be truoblesome for me either by PPF law or Incometax law.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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10 April 2011 Being the guardian of the kids you have opened PPF Accounts in the names of your children.

I am of the opinion that limit Rs.70000/- covers the deposits in the accounts of the children as well as of yours.

From 13.05.2010 ,Govt has banned on new PPF accounts for HUF( hindu undivided family) .

Read more: NO EXTENSION IN PPF ACCOUNT FOR HUF | SIMPLE TAX INDIA-TDS RATE INCOME TAX RATE

You may go through the notification -

“Provided further that an account opened on behalf of a Hindu Undivided Family prior to the 13th day of May, 2005, shall be closed after expiry of fifteen years from the end of the year in which the initial subscription was made and the entire amount standing at the credit of the subscriber shall be refunded, after making adjustments, if any, in respect of any interest due from the subscriber on loans taken by him. In the case of accounts opened on behalf of Hindu Undivided Family, where fifteen years from end of the year in which initial subscription was made, has already been completed, they shall also be closed at the end of the current year, i.e., the 31st day of March, 2011 and the entire amount standing at the credit of the subscriber shall be refunded, after making adjustments, if any, in respect of any interest due from the subscriber on loans taken by him.”

Read more: NO EXTENSION IN PPF ACCOUNT FOR HUF | SIMPLE TAX INDIA-TDS RATE INCOME TAX RATE

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