Any person can open a PPF account with him in the name of minor children also. Can salaried people who have high salary, can avail tax exemption by opening a PPF account in the name of their minor children?
New Delhi. Under the Public Provident Fund Scheme (PPF), 2019, any person can open his Public Provident Fund (PPF) account. Also, you can open a PPF account in the name of your minor children. Now the question arises that the salaried people whose salary is high, can they avail the benefit of tax exemption by opening a PPF account in the name of their minor children. In this regard, it is necessary for them to know the Income Tax Rules.
What is the rule
Under the Public Provident Fund Scheme, 2019, tax exemption is available on contribution up to Rs 1.50 lakh annually in the PPF account. Contribution made to the PPF account of minor children is also included in this. In other words, if you have opened a PPF account of your minor children, then the total contribution made in the accounts of yourself and those children should not exceed the limit of Rs 1.50 lakh. Income earned from investments made up to this limit is eligible for tax exemption.
Interest will be added to your income
The income earned from the PPF account of the minor child (except the minor who is disabled) is added to the income of the parents.Income TaxAs per the provisions of section 10(11) of the PPF account, income up to Rs 5 lakh per annum including interest earned from PPF account is not taxable. If you have opened a PPF account for minor children, then it is necessary to mention the interest earned from those accounts in your income tax return.
If your wife is also a taxpayer, then she can also deposit up to Rs 1.50 lakh annually in the PPF account from her personal income. They will also get tax exemption on this, but for this they will have to file their personal income tax return.
