Income of a Minor Child - How
& when clubbed??
in the name of a minor child are quite common, but are we aware of the
tax implication of income of minor child from such investments or
otherwise? Many a times we have income in the name of our minor child
and we feel as this income is of a minor, it will not be taxed. But its
not true, there is a provision to club the income of minor child in the
income of the parent. Lets understand how??
Clubbing of minor's income:
per Section 64(1A) of the Income Tax Act, income of a minor child shall
be included in the income of parent. Here income will be included in
the income of the parent whose total income is higher.
the rule of clubbing of minor's income:
Income of minor child is not clubbed to the income of
the parent in following cases:
- When the child is suffering from a disability
of the nature as specified in Section
here to know the disabilities as per Section 80U
the income of minor upto Rs. 1500 per annum:
- If the income of the minor child is earned by
- manual work done by the minor child; or
- an activity involving application of minor
child's skill, talent or specialised knowledge and experience
to Section 10(32) of the Income Tax Act, an amount upto Rs. 1500 per
annum, per minor child is exempt from tax
and therefore not to be included in parent's income. This exemption of
Rs. 1500 is available only for two minor children.
- Income of the year in which minor
child become major ie. attains the age of 18 years, shall not be
clubbed as the child is major at the end of that financial year.
the marriage of the parents do not subsist, the income of the minor
shall be included in the income of the parent who maintains the minor
child in that year.
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