PPF investment in minor name

Tax queries 302 views 4 replies

Suresh Kumar Ramasamy

Software Consultant

37 Points Posted on 12 July 2019

I make certain investments in my name, some in my wife's name, and some in our kids' names.
I club the return from all these investments (Section 64) and pay the required income tax.
The investments include 1.5 lakhs each in my own name, my wife's name, and our major daughter's name.
I periodically give my wife money for her personal expenses which are credited into an SB account. There is no other source of income for her.
From this money she wishes to invest in PPF account of our minor son.
All 4 of us have separate PAN.

Now HDFC Bank refuses this investment in our son's name, stating that a person cannot invest more than 1.5 lakhs per year. Given the above facts, is this valid?

Thanks.

Replies (4)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211711 Points Posted on 13 July 2019

Yes.

The PPF accounts of minor/s are open under guardianship, which means any person cannot invest more than 1.50 lakhs in aggregate, per annum in his own or minor's PPF account/s.

If at all its accepted by mistake, it is paid back without interest whenever the mistake gets recognized.

Suresh Thiyagarajan

Student

3986 Points Posted on 13 July 2019

1. Investment in PPF can be made on behalf of minor to the extent of Rs. 1,50,000 per year. One person (including minor) can have one PPF account each.
2. In your case son's account cannot have an investment in excess of Rs. 1,50,000 per year. Whether it is made by father or by mother. The aggregate amount cannot exceed Rs. 1,50,000.
3. The claim made by HDFC is valid if investment in Son's PPF a/c has touched the threshold limit of Rs. 1,50,000 during the year.
Please correct me if the above solution has an alternative view.

Suresh Kumar Ramasamy

Software Consultant

37 Points Posted on 15 July 2019

Thanks for your response. "... any person cannot invest more than 1.50 lakhs in aggregate, per annum..." - My wife is investing in my son's name only. The investment in her name is done by me. Isn't this legal and valid?