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
Note :−
- Minor child may be married or unmarried Even married minor daughter covered .
- He may be own child / adopted / step child
- 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
Income of Parents before clubbing
Hetal 460000
Dhaval 750000
Since Income of Dhaval is more,income of children will be clubbed in his hand
Amount to be clubbed
Income of minor son „B‟ who suffers from disability specified in Section 80U | Not clubbed |
Income of minor daughter „C' from singing | Not clubbed |
Cash gift received by 'C' on 2.10.2015 from friend of Mrs. Hetal on winning of singing competition | Not clubbed |
Income of minor married daughter „A‟ from company deposit | 30000 |
Total Amount to be clubbed | 30000 |
Less Exemption u/s 10 (32) | -1500 |
Net Amount to be clubbed | 28500 |
Incomes of children to be clubbed
Computation of Income of Parents
DHAVAL
PGBP Income | 750000 |
Add Income of Other Sources (Clubbing of Income of child) |
28500 |
Total income | 778500 |
HETAL
Income from Salaries | 460000 |
Add Income of Other Sources |
0 |
Total income | 460000 |
-ea-
EXAM QUESTION 2
Mr. Dhaval has an income from salary of Rs. 3,50,000 and his minor children‟s income are as under:
Particulars | Rs. |
Minor daughter has earned the following income: | |
From a TV show | 50,000 |
From interest on FD with a bank (deposited by Mr. Dhaval from his income) | 5,000 |
Minor son has earned the following income: | |
From the sale of a own painting | 10,000 |
From interest on FD with a bank (deposited by Mr. Dhaval from his income) | 1,000 |
Minor daughter Income | |
From a TV show | Not clubbed |
From interest on FD with a bank | 5000 |
Less | |
Amount Exempt | 1500 |
Balance Amount Taxable | 3500 |
Minor Son's Income | |
From sale of a own painting | Not clubbed |
From interest on FD with a bank | 1000 |
1000 | |
Less | |
Amount Exempt | 1000 |
Balance Amount Taxable | 0 |
Total Amount to be clubbed | 3500 |
It is to be clubbed in hands of parents whose income is higher before clubbing
Assuming only father Mr Dhaval is earning,income will be clubbed in his hands
DHAVAL
Income from Salaries | 350000 |
Add Income of Other Sources (Clubbing of Income of child) |
3500 |
Total income | 353500 |
EXAM QUESTION 3
Mr. Mittal has four minor children consisting of three daughters and one son. The annual income of all the children for the Assessment Year 2016-17 were as follows:
Particulars | Rs. |
First daughter (Including Scholarship received Rs. 5,000) | 10,000 |
Second Daughter | 8,500 |
Third Daughter (Suffering from disability specified U/s 80U) | 4,500 |
Son | 40,000 |
Mr. Mittal gifted Rs 2,00,000 to his minor son who invested the same in the business and derived income of Rs 20,000 which is included above. Compute the amount of Income earned by minor children to be clubbed in the hands of Mr. Mittal
View AnswerParticulars | First daughter (Including Scholarship received Rs. 5,000) | Second Daughter | Third Daughter (Suffering from disability specified U/s 80U) | Son |
Income to be clubbed | 5000 | 8500 | 0 | 40000 |
Less | ||||
Amount exempt | 1500 | 1500 | 0 | 1500 |
Balance to be clubbed | 3500 | 7000 | 0 | 38500 |
Learn in your speed, with individual attention - Teachoo Maths 1-on-1 Class