My wife, whose annual income is less than Rs 2.5 lakh, has been filing her income-tax return. Can I deposit money in her Public Provident Fund (PPF) account and claim Income tax Deduction under Section 80C in my Income Tax Return?
Yes You can claim deduction under Section 80C of Income tax Act for the amount deposited in your wife’s PPF account. The maximum deduction allowable for various schemes specified under the aforesaid Section is Rs1,50,000.
Relevant Extract of Section 80C of Income tax Act
80C. (1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in sub-section (2), as does not exceed 10[one hundred and fifty thousand rupees].
(2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the previous year by the assessee—
(v) as a contribution to any provident fund set up by the Central Government and notified (See Notification below) by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of any person specified in sub-section (4);
As per Section 80C (4) of Income Tax Act , For the purposes of clauses (v) The persons referred to in Section 80C(2) shall be
(i) in the case of an individual, the individual, the wife or husband and any child of such individual, and
(ii) in the case of a Hindu undivided family, any member thereof;
Public Provident Fund Notified under Section 80C(2)(v)
Notification under section 80C(2)(v) – Deduction in respect of contributions to provident fund – In exercise of the powers conferred by clause (v) of sub-section (2) of section 80C, the Central Government hereby specifies the Public Provident Fund, established under the Public Provident Fund Scheme, 1968, for the purposes of the said clause for the assessment year 2006-07 and subsequent assessment years.—Notification No. S.O. 1559(E), dated 3-11-2005.