You can decide to open te Public provident fund account of the name of children for reducing tax liability and option of long tern saving. An individual can open only 1 account with his name. In the case of opening PPF account with the name of minor child, the account will be maintained by the parents and practically both(individual and minor child) will be seen as one.
Eligibility- An Indian resident can open the PPF account with the name of minor child. Any of the parents(Father or Mother) can open the PPF account with the name of minor child. Both parents(Father and Mother) can not open the PPF account with same minor child. One account one person rule applies here.
Documents required- Documents required for opening the account of minor child are as follows.
- KYC documents of parents( Proof of address and 2 passport size photo)
- Photo of child.
- Proof of age of minor child( birth certificate or school ID proof)
Investment limit- investment cap is Rs. 1 lakh per annum for a single account or an individual plus minor child account. According to PPF rules, no interest will be paid on amount exceeding Rs. 1 lakh. 1 lakh limit is on individual basis and not on account basis.
Declaration- An individual needs to declare all his/her PPF account before opening a PPF account with the name of minor child.
Income tax exemption- Income tax exemption on PPF account is maximum of Rs. 1 lakh under section 80C of income tax act. This rule applies on both account.
In case of death or incapability of the parents of minor child, court appointed guardian can open the PPF account with the name of minor child.