RE:early closer of accounts
by Prakash Haran on Sep 12, 2006 02:48 PM Permalink
The Account Office (including office of SBI and its Associates) can condone default in payment of subscriptions in the PPF account by charging the prescribed fee (Rs 10) along with arrears of subscriptions.
There is a circular of about 3 years vintage which states that, in case of a minor's PPF account, the total contribution between the guardian and the minor can only total Rs.70,000. To take an example, say I have an existing PPF account and open one in my son's name. Between the two accounts, the total contribution can only be Rs.70,000 per annum. Please check this.
RE:PPF Account
by S Ray Chaudhury on Nov 30, 2006 05:25 PM Permalink
You are correct. What has been written in the article on this point is just not true. The circular states that in no case interest is payable on contributions of more than Rs.70,000 in a financial year (in more than one account). In case it is detected (at a later date) that such interest has been credited in the account(s) then it will have to be debited from the account.
In the budget presented by the Finance Minister in Feb 2005, he talked about the taxation scheme will be brought under EET regime from the prevailing EEE regime. We were given to understand that all deposits made to PPF after 01 Apr 2005 on maturity (on maturity of the 15 year account) will be taxable along with the interest earned. On the face of it it sounded absurd because accumulation of 15 years savings will bring the low paid employee/pensioner into the millionaire bracket. No one was prepared to clarify this point. Your article too ignores this feature. May this be clarified by anyone who knows the subject authoritatively
If I open two accounts, one in my name and the other in my son's name. I deposit Rs 70,000 each in both the accounts. I am clear that tax benefit is available upto a max limit of 70000 only. However when my son's account matures (after 15 years he would also become mature and loose the minority status) will that money be tax free and counted as his income and would the interest be accrued in his name
