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PPF investment made by proprietor to his minor child

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VijNat

owner

24 Points Posted on 23 July 2023

Dear Experts,

when a proprietor invests in PPF for his minor child, should this be treated as expense or as an investment, in books of accounts of the proprietor?

I understand, PPF investment made by the prop in his own name is to be shown as investment and interest on this inv under capital account.

Thanks.

Replies (5)

Quick Summary

This discussion explores how a proprietor should record Public Provident Fund (PPF) investments made on behalf of their minor child in their business's books. The consensus suggests it should be treated as a capital withdrawal or a gift from the proprietor's capital account, rather than a business expense. Specific accounting entries are also suggested for clarity.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121543 Points Posted on 23 July 2023

It would be capital withdrawal from the business accounts, while gift if withdrawn from capital account.

VijNat

owner

24 Points Posted on 23 July 2023

Thanks, Sir. Would be thankful if you could post the entries to be made..

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121543 Points Posted on 24 July 2023

Dr. Capital account

Cr. Bank

note: invested in PPF acc of....

sabyasachi mukherjee

Profession

19978 Points Posted on 04 August 2023

Ppf investment in favour of minor child will be in his name.

Aashok Kumar Sharma

Finance/Compliance Consultant

75568 Points Posted on 08 November 2026

PPF for a minor child paid from business funds:
• PPF contributions for a minor child are personal investments, not business expenses. Record them as drawings in the proprietorship books (Dr Drawings/Capital, Cr Bank).
• 80C: deduction allowed (old regime) for PPF contributions in the name of self, spouse or children, within the overall Rs 1.5 lakh limit (combined with the parent's own PPF).
• Interest on the minor's PPF is exempt (Sec 10(11)), so no clubbing issue.