PPF account for partner: How are you able to save revenue tax on curiosity revenue
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PPF Calculator: Public Provident Fund (PPF) is likely one of the most most well-liked long-term funding devices among the many traders who’ve zero danger urge for food. In this funding, the investor not solely manages an assured return however it additionally will get revenue tax exemption on one’s funding as much as ₹1.5 lakh in a selected monetary yr. But, what about these traders, who’ve exhausted their ₹1.5 lakh PPF funding restrict they usually nonetheless have surplus quantity for investing. As per tax and funding specialists, if the investor is married, then opening a PPF account within the identify of 1’s partner could be a good possibility. Experts mentioned that by opening PPF account within the identify of partner, the investor manages to double one’s PPF funding restrict, although the revenue tax exemption restrict will proceed to stay at ₹1.5 lakh.
Speaking on how PPF account within the identify of partner helps an investor double one’s PPF curiosity revenue; Harsh Roongta, Head at Fee Only Investment Advisers mentioned, “If an investor has zero risk appetite and it has exhausted its PPF investment limit of ₹1.5 lakh per annum. Opening a PPF account in the name of spouse is a better option. By doing this, the earning individual will not be able to claim income tax exemption beyond ₹1.5 lakh as source of investment in both accounts is the investor himself. But, PPF has some other features like income tax exemption on PPF interest earned and PPF maturity amount. By, opening PPF account in the name of spouse, the investor will be able to double one’s investment limit from ₹1.5 lakh to ₹3 lakh and will enjoy income tax exemption on PPF interest earned and PPF maturity amount in both PPF account.”
On how revenue tax guidelines work in favour of the investor opening PPF accounts each in a single’s identify and in a single’s partner identify; Manikaran Singhal, Founder at goodmoneying.com mentioned, “After investing in spouse’s PPF account, then source of income still continues with the husband and hence its income is added with the husband’s income. But, PPF interest earned is income tax exempted and hence PPF interest earned in one’s spouse PPF account doesn’t get added in the husband’s net income. Similarly, the husband goes on to enjoy the income tax benefit on PPF maturity amount getting accrued in the spouse’s PPF account.”
Singhal mentioned that below Section 80C of the Income Tax Act, PPF funding in a single monetary yr is capped at ₹1.5 lakh and therefore the husband should lose the revenue tax profit on funding in PPF account if he has exhausted his ₹1.5 lakh restrict. Otherwise, the husband will get all different advantages in a single’s spouse’s PPF account that he shall be getting in his personal PPF account.
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