Can both mother and father deposit money in their child’s PPF account? what is the rule
If you wish, you can open separate PPF accounts for your son and daughter. But here also the rule of Rs 1.5 lakh will work. While depositing money in their account, the total amount will be deposited in the PPF account of the son and daughter up to a maximum of Rs 1.5 lakh.
There is a special rule for depositing money in PPF account
As per the Public Provident Fund (PPF) Scheme, 2019, any parent or legal guardian in the name of his minor child PPF Account can open. Keep in mind that only one PPF account can be opened in the name of one person. There is no rule to open more than one. PPF According to the scheme 2019, there is no restriction on either the parent or both the parents to deposit money in the PPF account of their child. If both want, they can deposit money in the account of the minor child. But there is definitely a rule about how much money will be deposited.
According to the rule, no person can deposit more than Rs 1.5 lakh in his account or in the account of his child in a financial year. Hence, you can also deposit money in your child’s account while depositing money in your PPF account. But its limit will be Rs 1.5 lakh only. That is, you cannot deposit more than 1.5 lakh rupees in a year in the PPF account of you and your minor child.
Remember 1.5 lakh limit
The limit of Rs 1.5 lakh is for one PPF account. If you wish, you can open separate PPF accounts for your son and daughter. But here also the rule of Rs 1.5 lakh will work. While depositing money in their account, the total amount will be deposited in the PPF account of the son and daughter up to a maximum of Rs 1.5 lakh. The same rule holds for you and your wife as well. If you both want, you can deposit money in your child’s PPF account. But the amount of both should not exceed Rs 1.5 lakh.
PPF interest tax
The limit of Rs 1.5 lakh in PPF account is under section 80C of Income Tax. Now it is up to you whether to take tax exemption on this 1.5 lakh amount under 80C or not. You have to do one important thing for tax exemption. The money deposited in the son’s PPF account has to be shown as a gift. Here the interest received on the PPF account of the son will be taxable in the hands of the son.
In this, there is a rule of income clubbing in which the income earned from the PPF account of the son is clubbed with the income of both the parents, whose income is higher. In this way, the interest of the son’s PPF will be added with the income of you or your wife. But this rule will be applicable only if the interest on PPF account is more than Rs 1500 in a year.
