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PPF accounts for joint families

The inference under the tax laws need not always be applicable for contributions to Public Provident Fund, which are governed by its own regulations. The fact, that the two Hindu joint families with two different Permanent Account Numbers (PAN) are recognised for income-tax purposes, does not necessarily mean that it should have acceptance under Public Provident Fund Rules. But clause 3(ii)(a) of Provident Fund Scheme, 1968, itself permits the application from a HUF.

Two Hindu Undivided Families with same karta should, therefore, be eligible even under the Provident Fund Scheme, 1968, as they are two distinct joint families as recognised under the income-tax law in pursuance of the Hindu law as understood and interpreted for income-tax purposes.

The application form in Form A requires details of other accounts maintained by the applicant. In case, the first application for either HUF has been mentioned in the second application, it should be equally the fault of the Post Office to open a second account, if the present view taken by the Post office is correct.

If the application for second account was wrongly accepted, the proper course in view of its own negligence in accepting the second account is to cancel the second account, but at the same time grant interest till the date of closure of account. However, there is no rule against acceptance of an account of two different Hindu joint families with the same karta.

Since, however, post offices and banks are merely administering the accounts on behalf of the Central Government, this is a matter, which has to be sorted out by the Government, so that the Post-Master General would be justified in referring the matter to the concerned Ministry for solution, if he has any misgivings on the matter.

Incidentally, the facility of PPF Account for HUF and Association of Persons in Notification F.No.2/8/2005-NS/II dated May 20, 2005, has since been removed with effect from May 13, 2005, so that no new account in the name of HUF is now permissible.

Sec. 80C deduction should, however, be continued to be available for contributions made to accounts started earlier to this date. Presumably continuation beyond fifteen years for accounts maturing on or after May 13, 2005, should not be permissible.

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