PPF Account for Minors

PPF Scheme Overview

The Public Provident Fund (PPF) was established in 1968 as an investment option giving acceptable returns and some income tax benefits under Section 80C of the Income Tax Act by the National Saves Organization with the goal of encouraging small savings and investments among the people.

Anyone may create a PPF account and invest funds in it. PPF investments are regarded as one of the best ways for many investors to save money while also saving taxes. Furthermore, not only adults but even kids can create a PPF account. The minor, however, cannot open the account. In such circumstances, the account must be managed by the guardian until the child reaches the age of 18.

The Objective of PPF Account for Minors

The plan was created with the goal of mobilizing small savings by providing an investment with fair returns as well as income tax benefits. PPF investments are deemed safe since they are insured by the federal government. These authorities, however, have the authority to attach the relevant accounts in order to recoup their tax debts.

PPF Age Limit

There is no minimum age to create a Public Provident Fund account. Adults and kids as well can open an account. However, in the event of children under the age of 18, the account shall be handled on his or her behalf by a guardian until the minor reaches the age of 18.

There are no minimum or maximum age restrictions for opening a PPF account. Infants can have their own accounts, but they must be controlled by an adult, sometimes known as a guardian until the kid reaches the age of 18, at which point the youngster can run the account.

Minor PPF Account Rules and Eligibility

To be eligible for a PPF account for a minor, the following requirements must be met:

  • Individuals who are Indian residents can create a Public Provident Fund account and get tax-free returns.
  • The account can only be opened by one of the guardians.
  • The person running the account on behalf of the kid must be a natural or legal guardian.
  • The grandparents of a minor child cannot manage a PPF account unless they are legal guardians following the death of the parents.
  • When opening a PPF account, a nominee must be registered.
  • In a fiscal year, the individual can contribute a minimum of Rs. 500 and a maximum of Rs. 1.5 lakh to the minor’s PPF account (Please note that this should be the total contribution made by a family in a financial year).

Documents Required to Open a Minor’s PPF Account

The underage child’s parents/guardians must produce the following documents:

  • In the account opening form, provide information about the guardian and minor.
  • KYC papers of the guardian for account opening (along with the photograph).
  • Proof of the minor child’s age (Aadhaar card or birth certificate).
  • A check for Rs. 500 or more in first contributions to the PPF account.

Consideration Before Opening PPF Account for Minors

  • A PPF account in the name of a minor can be opened with a minimal initial deposit of Rs.100. The maximum yearly contribution, however, should be Rs.500, and the maximum sum can be Rs.1.5 lakh.
  • If the money invested in the minor’s PPF account comes from the parent’s or guardian’s income, it can be included under Section 80C of the Income Tax Act and will be eligible for tax advantages.
  • As soon as the minor reaches the age of 18, an application for account transfer from the guardian to the minor must be submitted.
  • In such situations, the application must be filed along with the necessary papers and the depositor’s signature, who has now become a major. The guardian who started the account must also testify to this application.
  • Under certain situations, a depositor may also attempt to close the minor’s PPF account.
  • However, such closure is permitted only after five years, and only if the withdrawn funds would be utilized for the account holder’s medical needs.
  • Furthermore, the minor’s PPF account may be prematurely terminated if the funds are utilized for the minor’s higher education.

  • If the guardian specifies that the funds will be used only for the benefit of the minor, the depositor may request a loan on the PPF account.
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