Can HUF open PPF account?
As per the new rules, HUF or Hindu Undivided Families cannot open a PPF account. It came into action in the year of 2011 March 31st when all the HUFs have been given orders to close their PPF account if they have completed a tenure of 15 years. This process was granted on March 31st, 2011 and under this, if there are any loans in the name of the holder, the loan amount will be deducted and the rest amount will be dispatched to the owner.
A gazette notification was issued on Dec 7, 2010 and under it, it was clearly mentioned that any account opened having a HUF priority will be closed after May 13th 2005 if it has attained a maturity level of 15 years. The credited amount will be refunded to the bearer, but the bearer will no more be eligible to apply for another PPF account.
This step was taken by the government of India on behalf of misusing the PPF account by several people. There are several people who used the PPF account to get benefits so that they can keep them safe from Tax exemption. This was an attempt to get double tax benefits and it is completely against the rules as the individual can hold only one account at a time.
HUF could start a separate PPF account with keeping in views the PPF rule and regulation. The head of a family is the significant operator of the account and is the main controller of the family. In that case, the daughters can become the member of the HUF. During the time of marriage, they can be the members of the HUF PPF account that their father has promoted.
After that, the government has fully stopped the fresh application of HUF in the PPF from May 25 onwards. But, there are several cases where several of them started to gain park funds in several good and popular saving schemes. There were several older investments that completed a 15 year period, while there were several people who could only attain the period of five year extension.
A recent notification by the ministry of finance ordered that as soon as the 15 year period ends, it is mandatory to refund the entire money to the remaining HUFs before May 13, 2005.
For those accounts, where 15 years have already passed out, the entire amount will be handed over on March 31 the next year. It only suggests that those accounts that were added after the ban came into action will continue, unless the period ends totally. But, the others will end the whole process at the end of the running financial year.
The ideas of small saving were implemented and provided so that a small segment of saving can be provided to the middle class those who are staying in the interior areas where banks and other financial services were out of reach. Any resident of India can open a PPF account at any age. He can deposit a minimum amount of Rs. 500 to maximum amount of Rs. 70,000 every year.