Archive · 15 Aug 2026
Kerala HC clarifies PPF ₹1.5 lakh limit for child's account
A Public Provident Fund, or PPF, is a very safe savings account in India that is backed by the government.
It pays interest — right now 7.1% — and helps families save for big things like a child's education or marriage.
There is a rule that families can only put up to ₹1.5 lakh into PPF accounts each year without losing tax benefits.
This limit includes money put into your own PPF account and money put into your child's PPF account.
If both parents each put ₹1.5 lakh into the same child's account, the total becomes ₹3 lakh, which breaks the rule.
Money deposited over the limit does not get the tax-free benefit anymore.
In one case, a mother opened PPF accounts for her children in 1999 and kept putting money in even after they became adults.
The Kerala High Court said those later deposits went over the limit.
The court ordered that ₹6,87,021 of earned interest had to be given up.
The ₹1.5 lakh tax-free PPF contribution limit per financial year applies to deposits in own, spouse's, and children's accounts combined.
If both parents invest ₹1.5 lakh each in a child's PPF account, the ₹3 lakh total exceeds the limit and is not tax-free.
Only one PPF account is allowed per individual, and minors' accounts must be converted after the child turns 18.
The Kerala High Court ruled that a mother's deposits to her children's PPF accounts after they attained majority exceeded the prescribed limit.
The court ordered forfeiture of ₹6,87,021 in accrued interest in the accounts, covering interest up to the date of attaining majority.
- Who
- The Kerala High Court and a mother who opened PPF accounts for her children in 1999.
- What
- A ruling clarifying that the ₹1.5 lakh annual tax-free PPF limit covers own, spouse's, and children's accounts combined, and ordering forfeiture of interest from deposits that exceeded the limit.
- When
- The accounts were opened in 1999; the mother continued contributing until 2005 and 2007, after the children turned 18.
- Where
- India, under the jurisdiction of the Kerala High Court.
- Why
- The mother's total contributions to her own and her children's PPF accounts exceeded the prescribed ₹1.5 lakh annual tax-free limit under PPF rules.
- Scheme
- Public Provident Fund (PPF)
- Current interest rate
- 7.1% this quarter
- Annual tax-free limit
- ₹1.5 lakh per financial year across own, spouse's, and children's accounts
- Accounts allowed per person
- One PPF account per individual
- Original tenure
- 15 years, extendable in blocks of 5 years
- Tax benefit
- Section 80C of the Income Tax Act
- Case accounts opened
- 1999, with contributions until 2005 and 2007
- Interest ordered forfeited
- ₹6,87,021 accrued in the accounts until the children attained majority
