Answer ( 1 )

  1. As per section 64(1A) , income of minor child is clubbed with the income of his/her parent (*). Income of minor child earned on account of manual work or any activity involving application of his/her skill, knowledge, talent, experience, etc. will not be clubbed with the income of his/her parent. However, accretion from such income will be clubbed with the income of parent of such minor.

    Income of minor will be clubbed with the income of that parent whose income (excluding minor’s income) is higher.

    If the marriage of parents does not sustain, then minor’s income will be clubbed with the income of parent who maintains the minor.

    In case the income of individual includes income of his/her minor child, such individual can claim an exemption under section 10(32)) of Rs. 1,500 or income of minor so clubbed, whichever is less.

    (*) Provisions of section 64(1A) will not apply to any income of a minor child suffering from disability specified under section 80U. In other words income of a minor suffering from disability specified under section 80U will not be clubbed with the income of his/her parent.

    Illustration F

    Mr. Raja has two minor children, viz., Master A and Master B. Master A is a child artist and Master B is suffering from diseases specified under section 80U. Income of A and B are as follows:

    Income of A from stage shows: Rs. 1,00,000
    Income of A from bank interest: Rs. 6,000
    Income of B from bank interest: Rs. 1,20,000.

    Will the income of minor children be clubbed with the income of their parent (Mrs. Raja is not having any income)?

    **
    As per section 64(1A) , income of minor children is clubbed with the income of that parent whose income (excluding minor’s income) is higher. In this case, Mrs. Raja is not having any income and, hence, if any income is to be clubbed then it will be clubbed with the income of Mr. Raja.

    Income of minor child earned on account of manual work or income from the skill, knowledge, talent, experience, etc., of minor child will not be clubbed with the income of his/her parent. Thus, income of A from stage show will not be clubbed with the income of Mr. Raja but income of A from bank interest of Rs. 6,000 will be clubbed with the income of Mr. Raja.

    Income of a minor suffering from disability specified under section 80U​ will not be clubbed with the income of his/her parent. Hence, any income of B will not be clubbed with the income of Mr. Raja.

    The taxpayer can claim an exemption under section 10(32)). Thus, in respect of interest income of Rs. 6,000 clubbed in the income of Mr. Raja, he will be entitled to claim exemption of Rs. 1,500 under section 10(32)), hence, net income to be clubbed will be Rs. 4,500 (i.e., Rs. 6,000 – Rs. 1,500). ​ Deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1) of rule 37BA​.​

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