Contribution to PPF

New Direct Tax Code 2459 views 4 replies

R Venkitachalam

Company Secretaries

29 Points Joined October 2008

I have a PPF Account to which I contribute the maximum amount specified of Rs.70,000/- pa. and claim relief under Sec. 80C. I am also a member of an HUF. Can the HUF contribute to my PPF account in the capacity as member another Rs.70,000/- and also claim 80C benefit for itself? As per a plain reading of Sec 80 C there does not appear to be a denial of such a claim as deduction is allowed on the basis of "contiribution"and not on the basis of receipt in the PPF account of the individual. The PPF Scheme does not appear to bar such "double"contribution to the same account, as they are in different capacities. I would appreciate a reply, if possible with some authoritive references which I can quote to both the Banker as well as the AO, if required. Thanks and Regards,

Venkat

Replies (4)

Sunil Liladhar Kotak

Manager (F & A)

2025 Points Joined December 2008

Dear,

To my mind the Limit of 70000/- is set for Single Account & contribution of HUF will not be allowed as deduction. However i do not have any authoritive references to confirm the same

Thanks & Regards,

Sunil Kotak

Rachit

Analyst

913 Points Joined January 2010

RBI vide its circular :

RBI/2004-05/468
Ref.No.CO.DT.15.02.001/H-9593-9615/2004-05 dt.14/05/05

has issued clarification restricting opening of a new account in the name of HUF.

Therefore for claiming deduction u/s. 80C HUF has to subscribe to the PPF A/c of its Karta or any of its coparceners

Amir

Learner

4016 Points Joined December 2009

Agree with sunil sir,

Maximum deposit in a FY ina single account is Rs. 70,000/- {Rule 3 of PPF Scheme 1968}

https://www.indiapost.gov.in/POSBActs/PPFRules1968.pdf

HUF can take benefit on deposit of sum in the name of any member or Karta .—Circular No.405 [F No. 178/1/84-IT(A-I)], DATED 15-1-1985 as corrected by Circular : No. 418 [F. No. 178/1/84-IT(A-I)], dated 2-5-1985.

R Venkitachalam

Company Secretaries

29 Points Joined October 2008

Hi Thanks for your prompt replies. Rule 3 of the Scheme specifically allow contribution in two capaciies, viz., one as an individual and another as member of HUF. It is true that no fresh PPF account can be opened in the name of HUF. As I am already a member of one I can contribute to this account from HUF funds/books. The point here is maximum deposit by an individual is Rs.70000 from his accounts and maximum deposit by an HUF is Rs.70000 from its accounts. I do belive the maximum amount could be Rs.1,40,000/- in one account unless there is a specific bar somewhere. Thanks and Regards, Venkat