Now Reading: Kerala HC clarifies PPF limit for children’s accounts
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Kerala HC clarifies PPF limit for children’s accounts
The Kerala High Court has ruled that contributions to a child’s PPF account after they turn 18 count towards the parent’s Rs 1.5 lakh annual limit. In a case where a mother…
The Story in Brief
The Kerala High Court has ruled that contributions to a child’s PPF account after they turn 18 count towards the parent’s Rs 1.5 lakh annual limit. In a case where a mother deposited into her children’s accounts after they became adults, the court ordered forfeiture of Rs 6.87 lakh in interest. PPF rules cap total deposits per individual at Rs 1.5 lakh a year, including investments in a child’s account. Parents often mistakenly think each can invest Rs 1.5 lakh in a child’s account, but the combined limit applies.
The Indian Opinion
Many parents assume they can each put Rs 1.5 lakh into a child’s PPF, doubling the tax benefit. The Kerala HC ruling shows this is a costly mistake. The real question is whether the finance ministry will now standardise the rules for conversion of minor accounts, saving others from similar forfeiture.
Source: livemint.com
This story was synthesised by AI from the source linked above.
