Opening a PPF account for your minor child: Here is all you need to know?

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Opening a PPF account for your minor child: Here is all you need to know?
As per rules, an individual is allowed to maintain only one PPF or public provident fund account, nonetheless, a parent or guardian of a minor child can also maintain another account under his/her guardianship for accumulating a corpus amount to meet funds for child's education or marriage. So, the rules allow PPF account in the name of the minor towards which the contributions can be done by the parent acting as the guardian or some other guardian in case the child's parents are not there or in case the parent is incapable.

However, before opening the public provident fund account for your minor child, you need to furnish the details of all your existing accounts for self or for minor children. And the details have to be provided in the declaration that is provided along with the PPF account opening form.

Declaration to be provided while opening a new PPF account for a minor child

The declaration hence require you to furnish details of all PPF accounts that you might have opened earlier. The details include name and address of the bank or Post Office where the PPF account is maintained as well as the account number. Further, the PPF account holder has to specify whether the account is maintained for self, minor child for whom he or she is the guardian or in the HUF account or in the name of Association of Persons (AOP).

Also for all the PPF accounts held by an individual either in his name or in the name of his minor child, the maximum amount in aggregate that can be invested is Rs. 1 lakh. So, nothing beyond this amount can either be invested in the PPF accounts nor can be claimed for deduction under section 80C of the Indian Income Tax Act.

PPF account maturity and ownership of the proceeds of the account

PPF account which is a long-tenure investment for a minimum of 15 years can mature either before the child becomes major or after. So, in both the cases, income earned as well as account operability is different. In the former case, when the PPF account matures even before the child turns 18, the accumulated corpus now becomes the income of the guardian or parent. And with total ownership of the account, he can also submit the application for extension of tenure of the account by another 5 year block.

In the other case however when the account matures after the child attains major status, entire proceeds from the account becomes his income. And, it shall be at its discretion to continue maintaining the account for another block of years or not.

Read more about: ppf, section 80c, savings, investment
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