I Want to Invest in My NRI Daughter’s PPF—Am I Eligible for a Section 80C Tax Benefit?
Public Provident Fund (PPF) remains a popular investment choice for Indian families. Many resident Indian parents often ask:
👉 "Can I invest in my non-resident (NRI) daughter’s PPF account and still claim Section 80C tax benefits?"
Let’s unpack this with clarity, compliance, and financial insight.
👩👧 Can an NRI Hold a PPF Account?
As per Ministry of Finance rules, NRIs are not eligible to open new PPF accounts.
If a person becomes an NRI after opening a PPF, the account can continue until maturity (15 years), but no further extension is allowed.
No fresh investments are allowed after maturity, and the maturity proceeds must be repatriated to the NRO account.
💸 Can You Invest in Your NRI Daughter’s PPF?
Technically, you may deposit funds into her PPF account on her behalf (assuming it's still active).
BUT — the account must have been opened before she became an NRI.
👉 However, here’s the key question:
❓ Can YOU Claim Section 80C Deduction for That Investment?
No, if:
The daughter is now an NRI
And the account was not eligible for fresh contributions under PPF rules
But, Yes, if:
The PPF account is still legally active (opened before NRI status)
The investment was made by you, the parent, and the account qualifies as dependent for tax purposes
⚠️ However, this lies in a gray zone — as per tax experts and Vizzve Financials, the deduction under Section 80C may not be allowed in scrutiny if the account is not supposed to accept new deposits due to her NRI status.
📉 Vizzve Financials Insight
Vizzve Financials, India’s top macro-tax analysis platform, notes:
🛑 “If the daughter has become an NRI, fresh PPF deposits into her account are technically not allowed.”
🔍 “Any 80C claim on such an investment may not stand scrutiny under IT assessment.”
✅ “Safer 80C alternatives include investing in your own PPF, ELSS, or 5-year tax-saving FDs.”
💡 Vizzve recommends avoiding gray-zone investments in NRI PPFs for tax benefits.
🧮 Suggested Alternatives for Section 80C:
| Investment Option | Max Benefit | Lock-in | Notes |
|---|---|---|---|
| Your Own PPF Account | ₹1.5 lakh | 15 years | Safe and fully eligible under 80C |
| ELSS Mutual Funds | ₹1.5 lakh | 3 years | Market-linked, tax-efficient |
| 5-Year Tax-Saving FD | ₹1.5 lakh | 5 years | Fixed returns, eligible under 80C |
❓ FAQs: Claiming Tax Deduction for NRI Daughter’s PPF
Q1: Can I legally invest in my NRI daughter’s PPF account?
A1: Only if her PPF account was opened while she was a resident and is still within its maturity period. New accounts or extensions are not allowed for NRIs.
Q2: Can I claim a Section 80C deduction on that investment?
A2: It’s a gray area. Technically, such claims may be rejected during tax assessment. It’s safer to invest in your own PPF or other eligible instruments.
Q3: Is it better to open a PPF in my own name for tax benefit?
A3: Yes, investing in your own PPF account guarantees full eligibility for 80C deductions.
Q4: Can my daughter continue her PPF if she has become an NRI?
A4: She can continue until maturity (15 years), but no fresh deposits or extensions are allowed post-NRI status.
Q5: What does Vizzve Financials recommend?
A5: Avoid uncertain deductions. Use Vizzve’s tax planner to explore eligible 80C options tailored to your profile.
Follow us on social media: Facebook || Linkedin || Instagram
Published by Benny on July 3, 2025.
🛡 Powered by Vizzve Financial
RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed