1 week ago
Court Clarifies Parents’ Limits Over Children’s PPF Savings
A PPF account can be opened for a child, but the money belongs to the child’s benefit.
While the child is under 18, a parent or guardian can operate the account.
They may use the money for important needs such as education or medical treatment.
They cannot use it for their own expenses.
They also cannot count the child’s savings as payment for maintenance owed to the child or the child’s other parent.
In one case, a father withdrew more than ₹8 lakh from his daughter’s account.
The Delhi High Court ordered him to return the full amount with 8% annual interest.
When the child turns 18, control of the account should be handed over along with its balance.
Deposits into a child’s account cannot exceed ₹1.5 lakh in a financial year, even if both parents contribute.
The Delhi High Court ordered a father to return more than ₹8 lakh withdrawn from his daughter’s PPF account, with 8% annual interest.
The father said the money should be adjusted against maintenance paid to his daughter and wife, but the court rejected that argument.
Parents or guardians may operate a minor’s PPF account and withdraw funds for the child’s education, medical care, or legitimate upbringing.
A parent cannot use the child’s PPF savings for personal expenses or to meet separate maintenance obligations.
Contributions to a minor’s PPF account cannot exceed ₹1.5 lakh annually, and a parent’s own and minor child’s accounts share that limit.
- Who
- A daughter and her father were involved in the dispute; the Delhi High Court ruled in the daughter’s favour.
- What
- The court ordered the father to return the PPF corpus he had withdrawn, with 8% annual interest.
- Where
- The case was heard by the Delhi High Court.
- When
- The father closed the PPF account in 2016; the article does not specify the date of the court ruling.
- Why
- The dispute concerned whether a parent could withdraw a child’s PPF savings and adjust them against maintenance obligations.
Parent’s Argument
Child’s Rights and Court’s View
Use of PPF savings for maintenance
Parent’s Argument
The father argued that the withdrawn amount should be adjusted against maintenance paid to his daughter and wife.
Child’s Rights and Court’s View
The court rejected the argument, holding that the child’s PPF savings cannot be used to discharge the parent’s independent maintenance obligations.
Guardian’s control of the account
Parent’s Argument
A parent or guardian may operate the account and make withdrawals for the child’s education, medical treatment, or other legitimate upbringing.
Child’s Rights and Court’s View
That authority is limited: the parent acts for the child’s benefit, cannot use the money personally, and must hand over control and the accrued balance when the child turns 18.
Key facts
- Amount withdrawn
- More than ₹8 lakh
- Interest ordered
- 8% annually
- Account closure
- The father allegedly closed the account in 2016
- Permitted use
- The child’s education, medical treatment, or legitimate upbringing
- Handover age
- Control should pass to the child at age 18
- Annual minor-account limit
- ₹1.5 lakh in total contributions
- Combined parental limit
- A parent’s own PPF account and the minor child’s account together cannot receive more than ₹1.5 lakh annually
Quotes
Apoorva Pandey
Advocate at the Delhi High Court
“Where funds are invested in the child’s name for the child’s benefit, the parent, even as guardian, holds such funds in a fiduciary capacity and cannot utilise them to offset maintenance obligations.”
livemint.com
Sources
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