Now Reading: Kerala HC: Rs 1.5 lakh PPF limit includes child’s account
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Kerala HC: Rs 1.5 lakh PPF limit includes child’s account
The Kerala High Court has ruled that the annual Rs 1.5 lakh PPF contribution limit applies cumulatively to a parent's own account and their minor child's account, not separately. The court ordered…
The Story in Brief
The Kerala High Court has ruled that the annual Rs 1.5 lakh PPF contribution limit applies cumulatively to a parent's own account and their minor child's account, not separately. The court ordered forfeiture of Rs 6.87 lakh in interest from a mother who exceeded the cap by depositing into her children's PPF accounts even after they turned 18, according to livemint.com and businesstoday.in.
Both parents cannot each deposit Rs 1.5 lakh in a child's PPF account; the combined contribution from all family members must stay within the Rs 1.5 lakh ceiling. If a parent also has their own PPF account, deposits to the child's account reduce the amount they can put in their own. The interest earned on PPF is tax-free, but exceeding the limit can lead to forfeiture of excess interest.
The Indian Opinion
The Kerala HC order underscores a rule many parents overlook: the Rs 1.5 lakh PPF cap covers all accounts in a family, not each child separately. The narrative that parents can double-dip into a child's account is a misunderstanding, not a loophole. The forfeiture of interest in this case is a stiff but fair warning. The real test now is whether the government will issue a plain-language circular to prevent future confusion, or leave families to learn this lesson in court.
Sources (2): livemint.com, businesstoday.in
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
