Minor Account

A PPF account can be opened by a parent or guardian on behalf of a minor. The contributions to both the accounts (parent and minor) together in a year cannot exceed the maximum limit of contribution.

Important points to note about PPF account for minors

Here are some points to keep in mind regarding PPF accounts for minors:

Opening the Account: A parent or legal guardian can open a PPF account on behalf of a minor.

Operation of the Account: The account is operated by the parent/guardian until the minor turns 18, after which the minor can operate the account.

Deposit Limit: The combined deposit limit in the account of the minor and the guardian (who opens the account) cannot exceed INR 1.5 lakhs in a financial year.

Tax Benefits: Investments made in the minor’s PPF account also qualify for tax deduction under Section 80C of the Indian Income Tax Act.

Nomination: Nomination facility is not available if the account is opened on behalf of a minor.

Loan against PPF: The guardian can avail a loan against the PPF account from the third to sixth financial year. The loan amount will be capped at 25% of the balance at the end of the second year immediately preceding the year in which the loan is applied for.

Premature Closure: The premature closure of a PPF account is allowed after five financial years for specific reasons, such as treatment of life-threatening diseases for the account holder, spouse, dependent children or parents, or for higher education of the account holder.