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What happens to the interest on PPF accounts for children once they turn 18? Does the PPF account keep earning interest if there is no contribution, especially if the child is pursuing higher studies? Assuming my son takes four years for graduation and two years for masters, he would be around 24 years before he starts a job and earns a salary. In that case, does his PPF account continue to earn any interest?

After turning 18, if I contribute to my son’s PPF account, do I still need to split it between his and my account or can I contribute 1.5 lakh in my PPF account and 1.5 lakh in his PPF account as well?

—Name withheld on request


As per the current provisions of the Public Provident Fund Scheme, 2019 (PPF Scheme), the minimum annual contribution to a PPF account is 500. If any account holder fails to deposit the minimum amount, the account shall be treated as discontinued. However, even in such a case, the account holder shall continue to earn interest on the balance in the discontinued account at the rate applicable to the scheme from time to time. The PPF account shall also continue to earn interest, even after a minor attains 18 years of age. Further, as per the PPF Scheme, maximum of 1.5 lakh per annum can be deposited per PPF account. Accordingly, once your son becomes a major, you can contribute 1.5 lakh, respectively, to your and your son’s PPF accounts. However, please note that from a tax deduction perspective, the deduction in your hands would be limited to the maximum limit of 1.5 lakh as prescribed under Section 80C of the Income Tax Act, 1961.


I’m a 36-year-old central government employee. I had invested in the stock market and applied for IPOs. I got 12,300 realized profit and 71,800 unrealised profit for FY21. Should I disclose this profit in the income tax return as capital gains? If it is mandatory, which income tax return form should I submit?

—K. Jaya Krishna


We have presumed that you do not have income from business. Any realized profit from the sale of listed equity shares shall be chargeable to tax as capital gains in the financial year of sale. Where the listed shares are held for more than 12 months, the same shall be considered as long-term capital asset and gains arising out of the same shall be taxable as LTCG. If the listed shares are held for 12 months or less, the same shall be considered as short-term capital asset and the gains arising out of the same shall be taxable as STCG.

Any unrealized profit would not be chargeable to tax and is not reportable on your tax return. Further, you will need to file your India tax return using Form ITR-2. The details of sale and purchases would need to be reported in Schedule CG of Form ITR-2 and Schedule 112A.

Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India.

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