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Ppf investment by huf

archana pitti (accountant and auditor) (111 Points)

27 March 2016

Hi everyone I have already invested in my ppf account in an individual capacity....now in order to claim deduction u/s 80c for huf can I submit an amount from hufs bank account to my ppf account and claim deduction?

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14 Replies

deepak (aa) (25 Points)
Replied 27 March 2016

hmmmmmmmm ss sssssssssssssssssssssssssssssss

Rohit Aggarwal (ACA Bcom (H) MBA MCom) (470 Points)
Replied 28 March 2016

No. The contribution of PPF should be in the PPF Account of the HUF only.

archana pitti (accountant and auditor) (111 Points)
Replied 28 March 2016

No sir huf can't open ppf account in its name... Have a look https://incometaxmanagement.com/Pages/HUF/12-HUF-Public_Provident_Fund(PPF)Account.H T M L

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 28 March 2016

PPF accounts are barred for HUF from may 2003 onwards.

however if any HUF is holding an PPF prior to that time, it would continue till its matury (15 yrs maturty maximum, would not get any extension)

HUF is also barred from NSC investments

However HUF can make payments towards LIC premiums of its members

archana pitti (accountant and auditor) (111 Points)
Replied 28 March 2016

Agreed sir... Bt I have read somewhere that huf can claim ppf deduction towards the payment of its members.... Thereby my doubt arises as to where a member claiming deduction in individual capacity and a huf contributing additional amount in individuls ppf account can it b claimed?.... Its like an individual invested 1.5 lacs and claimed deduction and then huf also contributed additional 1.5 lacs in d same ppf account bt transferred from hufs sb account.... Now can huf also claim deduction for ppf??

archana pitti (accountant and auditor) (111 Points)
Replied 28 March 2016

Its like single ppf account contribution by two different assessed..... Can both claim deduction?

CA Pooja Chaudhary (Chartered Accountant ) (26 Points)
Replied 28 March 2016

Maximum limit of contribution in one ppf account in a financial year is 1.5lac. As per rules its not allowed to invest more than I.5lac in one FY. However huf can claim deduction for contributing in its member account if investment amount in one ppf account together with contribution of its member is 1.5lac.

1 Like

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 28 March 2016

Originally posted by : CA Pooja Chaudhary
	Maximum limit of contribution in one ppf account in a financial year is 1.5lac. As per rules its not allowed to invest more than I.5lac in one FY. However huf can claim deduction for contributing in its member account if investment amount in one ppf account together with contribution of its member is 1.5lac.

F.No.7/4/2008-NS.II
Ministry of Finance
Department of Economic Affairs
(Budget Division)

New Delhi, the 1st June, 2011

The CGM (DGBA)
Reserve Bank of India
Department of Government & Bank Accounts
Central Office, Byculla Office Building
4th floor, Opposite Mumbai Central Railway Station
Byculla, Mumbai – 400 008

Sub: Payment of interest in respect of PPF (HUF) accounts

Sir,

I am directed to say that as per the provisions contained in Public Provident Fund (PPF) Scheme, 1968, prior to 13th May, 2005 accounts could be opened by individuals and on behalf of HUFs. With effect from 13th May, 2005 opening of PPF accounts has been restricted to “individuals” only. In this regard, a clarification was issued by Finance Ministry vide letter No. F.2/8/2005-NS.II dated 20.05.2005 intimating that PPF accounts of HUF shall continue till maturity and deposits/withdrawals in/from these accounts shall be allowed to be made in accordance with the rules of the scheme. However, any extension of existing accounts shall be subject to the amendment dated 13th May, 2005.

2. As per Paragraph 9 (3) of PPF Scheme, 1968, a subscriber to the account, any time after the expiry of 15 years from the end of the year in which the initial subscripttion was made, if he so desires, can apply for withdrawal of the entire balance standing to his credit. Further, as per proviso below Paragraph 9 (3), the subscriber may, if he so desires, make withdrawal of the amount standing to his credit from time to time in instalments not exceeding one in a year.

3. An amendment has been made to PPF Scheme, 1968, vide this Ministry’s Notification No. G.S.R. 956 (E) dated 7th December, 2010. A new Proviso below Sub Paragraph 3 of Paragraph 9 of PPF Scheme, 1968 has been inserted, according to which PPF accounts opened on behalf of HUFs prior to 13th May, 2005 shall be closed after expiry of 15 years from the end of the year in which initial subscripttion was made. In respect of those HUF accounts where the initial period of 15 years had already been completed prior to the issue of Notification dated 07.12.2010, such accounts were to be closed on 31st March, 2011.

4. Some of the subscribers of PPF (HUF) accounts had closed the accounts on maturity or thereafter between 13th May, 2005 to 7th December 2010 (before the issue of the aforesaid amendment). Some of such account holders, were not paid interest at PPF rates on the deposits retained beyond the maturity period (without further subscripttions). Those subscribers had been representing that interest at PPF rate may also be paid to them on the deposits that were retained in PPF accounts beyond maturity period. The matter has been examined in this Ministry and it has been decided that interest at PPF rate would be paid on those PPF (HUF) accounts, which had attained the maturity after 13.05.2005 but closed by the subscribers before 07.12.2010, subject to the conditions that the accounts had not been extended thereafter and the deposits were retained in such accounts without further subscripttions.

5. The above decision may be circulated to all concerned for compliance.

6. This issues with the approval of Secretary (EA).

Yours faithfully

(M. A. Khan)
Under Secretary to the Govt. of India

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 28 March 2016

Small schemes: The HUF as an entity cannot invest in government's small savings schemes, such as thePPF, NSC, monthly income schemes, recurring deposits and other time deposits.

Points to note

1) The HUF accounts cannot be opened with joint holders.

2) No nominee can be appointed for the HUF accounts.

https://articles.economictimes.indiatimes.com/2013-06-17/news/40027718_1_the-huf-demat-account-kyc

2 Like

CA Shree Jain (Chartered Accountant) (1572 Points)
Replied 28 March 2016

PPF accounts can no longer be opened in name of HUF....

Yes, As per Section 80C, HUF Can Pay on behalf of 'Any Member of HuF' (Whether Minor or Major).
So the HUF can pay PPF for its Minor Member & Can Claim deduction under secion 80C.
Source: [url]https://www.exploreincometax.com/Indian-Income-tax-Act-1961/Section-80C [/url]

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 28 March 2016

Originally posted by : CA Ash Jain
	PPF accounts can no longer be opened in name of HUF.... Yes, As per Section 80C, HUF Can Pay on behalf of 'Any Member of HuF' (Whether Minor or Major). So the HUF can pay PPF for its Minor Member & Can Claim deduction under secion 80C. Source: [url]https://www.exploreincometax.com/Indian-Income-tax-Act-1961/Section-80C [/url]

to some extent agreed

but

the payment is made by cheque, for any minor PPF account,

and NOT for a PPF account which is already tax payer.

Prateek (Partner) (143 Points)
Replied 16 May 2016

You cannot open a ppf account after 2005. If you are maintaning an old account you have to deposit amount in HUF account only to get deduction in HUF return. For more information you can visit - PPF

mayank sanchety (41 Points)
Replied 15 March 2019

Is Interest on HUF Account after Closure of PPF Ac cannot take it.

The post office Master had only given the Invested Amount not the Interest accrued.

Siddharth Chhajer (2 Points)
Replied 18 April 2021

YES...

Investment in PPF A/c of Karta or any member can be made by HUF through its bank account and deduction u/s 80C shall be accordingly claimed by the HUF only.. Refer he below mentioned article also for clarity.. HOWEVER I AM CONFUSED AS TO WHAT ACCOUNTING TREATMENT SHOULD BE GIVEN IN BOOKS OF ACCOUNTS OF BOTH KARTA & HUF?

https://www.hdfcbank.com/personal/resources/learning-centre/save/5-huf-income-tax-benefits