INCOME OF MINOR CHILD

It is clubbed in the hands of parent whose total income is greater without including such income

Max Rs.1500 Exemption per child is provided regarding this income

If income once clubbed in one parent will always be clubbed in that parent only. However AO can tax it in other person’s income after giving opportunity of being heard.

 

Exceptions

In below mentioned cases, there is no clubbing. Income is taxed in hands of minor

  • Income earned by minor child on account of manual work done by him
  • Income earned by minor on applying skill, talent or knowledge.
  • Income of a disabled child (He must be suffering from a Disease specified in Section 80U .l ike Blindness,Low vision,Leprosy cured Hearing impairment,Locomotors disability,Mental retardation,Mental illness

     

 

Income of Minor Child - Different types of Clubbing

 

 

Note :−

  1. Minor child may be married or unmarried Even married minor daughter covered .
  2. He may be own child / adopted / step child
  3. In case minor child becomes major during the year : 

           Income from 1 st April to the date before he become major:- Clubbing applicable

           After he became major:- No Clubbing

    4.  In case of divorce income will be taxable in the hands of person who maintains the minor child in the previous year.

 

EXAM QUESTION 1

Mr. Dhaval and his wife Mrs. Hetal furnish the following information:

Sl. No Particulars Rs.
(i) Salary income (computed) of Mrs. Hetal 4,60,000
(ii) Income of minor son „B‟ who suffers from disability specified in Section 80U 1,08,000
(iii) Income of minor daughter „C' from singing 86,000
(iv) Income from profession of Mr. Dhaval 7,50,000
(v) Cash gift received by 'C' on 2.10.2015 from friend of Mrs. Hetal on winning of singing competition 48,000
(vi) Income of minor married daughter „A‟ from company deposit 30,000

Compute the total income of Mr. Dhaval and Mrs. Hetal for the Assessment Year 2016-17.

View Answer
  1. Income Tax
  2. Clubbing of Income of Other Persons
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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