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Ppf minor child investment deduction

Tax queries 705 views 2 replies

Sir/Madam,

I have opened a PPF account in the name of my minor child.The cash gifts received (of rs 50000)by the minor child ,i have deposited in her PPF account. Also , I have deposited Rs.50000 out of my pocket in my PPf account . How much deduction under section 80c can i claim?

Whether I can claim Rs 100,000 or Rs.50,000??

Replies (2)

Yes, deduction of Rs. 100000 can be claimed by you. However, you must also be careful regarding taxability of gift received by your child. If it is taxable, the amount should be included in your's or your wife's income and accordingly only that person would be able to take the benefit of deduction of the said investment made in the child's account.

In your case clubbing provisions wil apply, the gifts received by your minor child will be clubbed with the income of the parent whose gross total income is higher.If your Gross Total Income(GTI) is more than your spouse's GTI , those gifts will be clubbed with your income .As per the provisions of Sec. 10(32) of IT act, in case of clubbing of income of minor child the assessee can also claim a fixed deduction @ 1,500 per minor child. WIth respect to deduction under 80c, the assesse can claim the deduction for taking ppf for the benefit of the assesse himself or for his/her spouse or for the dependent parents or for dependent children, so in your case you can claim deduction of Rs.1,00,000. smiley


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