Can an HUF avail tax deductions on payment made to PPF accounts?
Can a Hindu undivided family (HUF) open a Public Provident Fund (PPF) account? Can it avail tax deductions on payment made to PPF accounts of any or all of its coparceners (of course within the cumulative limit of ₹1,50,000) by making payments from its bank account (just like insurance premiums)?
-Anonymous
By Balwant Jain, tax and investment expert
Opening of a PPF account is governed by the PPF scheme 2019 whereas the deduction for contribution towards PPF account are regulated by provisions of Income Tax Act. As per the Public Provident Fund Scheme 2019 only an individual who is a resident of India, for tax purposes, can open a PPF account and therefore HUF is not allowed to open the PPF account as per the PPF scheme. However as far as making contribution and availing the tax benefits by HUF are concerned the same are regulated by the Income Tax Act and there is nothing in the income tax act prohibiting an HUF by claiming deduction under Section 80 C for contribution made by it to the PPF account of not only of any coparcener but also any of the member including Karta of the HUF.
