I currently hold a PPF account. I want to open two more accounts for my children who are minor at the moment. In a given financial year can I deposit a sum of Rs one Lakh each in my account, my son's account and my daughter's account? Is this acceptable from tax point of view? I understand that I will be depositing Rs three lakh in a given financial year, but will be eligible only for Rs one Lakh for tax exemption.
-Vijay Singh M
Yes you can open a PPF account in your children's name as they are minors. You need to comply with following provisions to open a PPF account:
1) A Public Provident Fund (PPF) account can be opened by resident Indian Individuals and individuals on behalf of minors.
2) Only one Public Provident Fund (PPF) account can be maintained by an Individual, except an account that is opened on behalf of a minor.
3) A Public Provident Fund (PPF) account can be opened either by the Mother or Father on behalf of their minor Son or Daughter; however the Mother and Father both cannot open Public Provident Fund (PPF) accounts on behalf of the same minor.
4) Grand-parents cannot open a Public Provident Fund (PPF) account on behalf of minor grandchild; however, in case of death of both the Father and Mother, Grandparents can open a Public Provident Fund (PPF) account as guardians of the Grand-child.
You are right about the taxation part. You can open a PPF account on your children's name as their guardian but you can't avail a tax deduction on all the accounts. Your tax deduction will be limited to Rs one lakh for a financial year.
This article was originally published on February 12, 2013.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
