clubbing of income
This query is : Resolved
SHWETA GERA
(Querist)
02 August 2010
What is the treatment in following two cases:
1.interest from bank received by minor child on deposit made out of her income from special talent.
2.gift received by minor child from his mother's friend.
1.interest from bank received by minor child on deposit made out of her income from special talent.
2.gift received by minor child from his mother's friend.
CA Sanat Pyne
(Expert)
02 August 2010
1. TAXABLE IN THE HANDS OF MINOR CHILD. AS THE MAIN SOURCE OF INCOME IS FROM SPECIAL TALENT.
2. TAXABLE IN THE HANDS OF PARENT IF EXCEEDS 50000/- PA.
2. TAXABLE IN THE HANDS OF PARENT IF EXCEEDS 50000/- PA.
CA Ravi Sisodia
(Expert)
02 August 2010
1).interest from bank received by minor child on deposit made out of her income from special talent -----
interst should be club in father/mother income becouse interst income is not earn by special talent by ninor child.
interst should be club in father/mother income becouse interst income is not earn by special talent by ninor child.
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SHWETA GERA
(Querist)
02 August 2010
THANKYOU SIR
02 August 2010
Case VI: When Individual is assessable in respect of income of his Minor Child [Sec. 64(1A)]
*Taxability: In case an Income is earned by a child before his attainment of 18 years of age, then such income of child will be included in the income of the parent whose taxable income, excluding income includible u/s 64(1A), is GREATER .
*Exemption u/s 10(32): In case of inclusion of income earned by a minor in the parent’s income, exemption of Rs. 1,500/- per Child per Annum or Income earned by child whichever is lower.
*Non Taxability of Income in certain cases:
1.Income of a Minor Child suffering from any disability specified u/s 80U .
2.Income of a Minor Child on account of any Manual work.
3.Income of a Minor Child on account of any activity involving his Skill, Talent or Specialized knowledge & Experience.
PLEASE NOTE:
*Child herein includes both Step child as well as Adopted child.
*If both the Parents of the minor child are not alive and such minor is maintained by a guardian, then guardian of the minor child should file a return of income on behalf of the minor. In no case will the income be clubbed in the hands of the Guardian.
*Where child attains majority during the previous year part of the income earned by the child during his minor stage shall be clubbed in the hands of the Parent.
*Taxability: In case an Income is earned by a child before his attainment of 18 years of age, then such income of child will be included in the income of the parent whose taxable income, excluding income includible u/s 64(1A), is GREATER .
*Exemption u/s 10(32): In case of inclusion of income earned by a minor in the parent’s income, exemption of Rs. 1,500/- per Child per Annum or Income earned by child whichever is lower.
*Non Taxability of Income in certain cases:
1.Income of a Minor Child suffering from any disability specified u/s 80U .
2.Income of a Minor Child on account of any Manual work.
3.Income of a Minor Child on account of any activity involving his Skill, Talent or Specialized knowledge & Experience.
PLEASE NOTE:
*Child herein includes both Step child as well as Adopted child.
*If both the Parents of the minor child are not alive and such minor is maintained by a guardian, then guardian of the minor child should file a return of income on behalf of the minor. In no case will the income be clubbed in the hands of the Guardian.
*Where child attains majority during the previous year part of the income earned by the child during his minor stage shall be clubbed in the hands of the Parent.
SHWETA GERA
(Querist)
02 August 2010
THANKYOU SIR
CA Ravi Sisodia
(Expert)
02 August 2010
2).gift received by minor child from his mother's friend -------
if gift exceed Rs. 50000/- then club in the mother/father income.
if gift exceed Rs. 50000/- then club in the mother/father income.
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Murtaza I Bhagat
(Expert)
02 August 2010
yes,
simple if less than 50,000 then no need otherwise it will be taxable in parents hands.
simple if less than 50,000 then no need otherwise it will be taxable in parents hands.
Aditya Maheshwari
(Expert)
02 August 2010
Murtuza
What about first part?
Two contrary views above?
What about first part?
Two contrary views above?
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02 August 2010
i agree with ravindra sir... since interest is not earned out of spl talent by child it would be clubbed. only the income earned by the child would be exempt
Ratan Sharma
(Expert)
02 August 2010
In my opinion interest from bank received by minor child will not be clubbed in the hands of father/mother. If the money earned itself is taxable in the hand of minor child then how income related to such money will be clubbed in the hands of parents.
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