Clubbing income of minor child

There's Income of minor child which has been clubbed in the hands of parent. On this Income, Deductor has deducted TDS against the name of minor which is reflecting in minor 26AS.

While assessing Income of the parent, even though Income has been clubbed, Income Tax Department is not giving the credit for TDS which is against  minor name.

Kindly advice the best practice  to be followed while filing the Return of Income of Parent so that IT department gives credit for TDS which is against minor name.

Regards

CA Vinay Channabasappa

Replies (3)
What is the nature of income of the minor child? If the income is substantial enough to attract TDS deduction, has it been earned out of any investment made by the parent that attracts clubbing provision under section 64(1A)? If no, then the income would be assessable in the hands of the child only. If yes, then the income is assessable in the hands of the parent. In such a case, as per section 199, where the income on which tds is deducted is assessable in the hands of another person, the deductee shall provide the deductor with a declaration containing the name, address and PAN of such other person, details of the payment and reason for such credit to be given to that other person. Based on this declaration, the deductor shall furnish the details of that other person (in this case, the parent), in the tds return. Thus the credit for the same would in turn get reflected in the form 26AS of the parent for availing credit. So, the best course of action, now, would be to providethe above mentioned declaration to the deductor and request them to revise the tds return with the details of the parent and issue a revised tds certificate. Based on this certificate, the parent can claim tbe credit for tds deducted on the income of the minor. Hope this clarifies.

Yes, Raghveer is correct.

agree with above

tks

ramanuj

 

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