PPF rules for NRIs: Can parents fund a daughter’s account after she moves abroad?

Can father contribute to child's PPF after they move abroad?

My daughter settled in Canada after her marriage in 2024. She opened her PPF account in 2016 when she was in India. She also has savings bank accounts held jointly with her mother. She does not have any source of income in India now. Can I deposit Rs 1.5 lakh a year in her PPF account to keep it active or can it be closed before the 15-year maturity period? I have my own PPF account in which I deposit Rs 1.5 lakh every year. Can she continue her savings bank accounts as the first holder or should her status be changed to second holder in the joint savings account?

Expert advice: According to PPF rules, a person who becomes a non-resident under FEMA cannot open a new PPF account. However, a non-resident can continue contributing to an existing PPF account that was opened when they were a resident. Such an account cannot be extended beyond the initial 15-year period or any existing extension. The money in a PPF account is non-repatriable, so the maturity proceeds must be deposited into the NRO account of the account holder. A non-resident can remit up to $10 lakh from the NRO account every year after paying applicable taxes, if any.

Since the maximum tax benefit under Section 80C is already being availed by depositing Rs 1.5 lakh in your own PPF account, depositing an additional Rs 1.5 lakh in her account will not provide any further tax benefit. To keep her PPF account active until maturity, only Rs 500 needs to be deposited each year.

Moreover, an individual cannot deposit more than Rs 1.5 lakh in total across their own account and the accounts of their children. Therefore, if Rs 1.5 lakh is to be deposited in her PPF account, it is advisable to gift the amount to her so that the contribution is made from her bank account.

Since she has become a non-resident under FEMA, she must inform the bank of her change in residential status. The bank will then redesignate her existing savings accounts as NRO accounts. She does not need to change her status as the first holder in the joint account with her mother.

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