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Clubbing minor child's income

Anand (Others) (31 Points)

30 July 2014

Hi, my minor son has income from interest from fixed deposits for which TDS is being deducted on my wifes PAN number as her income was higher than mine. Now since april 2013 my income is higher but the TDS is continuing to be deducted on my wifes account as the fixed deposit is for two years and i could not change to my PAN account.

My question is since my income is higher now i have to add my childs income to my income while filing my returns so how do i file the return as the TDS is on my wifes account

Thanks

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7 Replies

Hitesh Khanna (Accounting & Finance Taxation Company Law Audit ) (839 Points)
Replied 30 July 2014

During the First Instance of Clubbing, The Income of The Minor Child Is clubbed in the Hands of either of his parent whose income during such year was higher.

Once Income Has been Clubbed with either of his parents ,the Income of the Minor Child Shall so continued to be clubbed with that parent only in the subseuent years.

Anubhav (Chartered Accountant) (429 Points)
Replied 30 July 2014

Income be clubbed in fathers income. Let father take the benefit of credit of tds deducted in PAN of mother.

Department will give credit . you can give reference of CBDT notification.

For notification, either PM me or mail me .

AJH & CO

anubhavjain @ ajhco.in

9868729930

Anand (Others) (31 Points)
Replied 30 July 2014

Thanks Anubhav,

The TDS deduction from my account is sufficient to cover the tax for mine and my sons income with no outstanding tax.

Could i just simply club my sons income with mine and claim refund of TDS thru my wifes IT return

Would it be a problem because my wifes form16A will show a much higher income than what is being filed in her return

Anubhav (Chartered Accountant) (429 Points)
Replied 30 July 2014

No problem with that. That will much more convenient for you. As department will not have any issues with such a treatment.

I would request you to kindly click on the thanks tab. A s it would be more beneficial..

Hitesh Khanna (Accounting & Finance Taxation Company Law Audit ) (839 Points)
Replied 30 July 2014

Please note that The Assessee cannot Club Minors Income in the file of either of the parents in the subeuent years at his sweet WILL.. There are are certains laws to be followed.

Please find a link, Go throught this link, Read the Sub heading which says Clubbing of Minor's Income. It says AO will decide

https://www.moneycontrol.com/news/tax/clubbingminors-income_594231.H T M L

Anand (Others) (31 Points)
Replied 30 July 2014

Hi Hitesh,

you have a point there, i went to the official incometax website and this is what it says.

"IF IN ANY SUBSEQUENT YEAR THE INCOME OF THE OTHER PARENT BECOMES GREATER, WILL THE INCOME OF THE MINOR-CHILD CONTINUE TO BE ASSESSED IN THE HANDS IT WAS FIRST ASSESSED?

No. It has to be assessed in the hands of the parent whose total income is greater. However, his Assessing Officer has to first give him/her a notice informing him/her that for that year the minor-child's income has to be included in his/her hands as he/she has greater total income than his/her spouse."

As i interpret it says the minor childs income has to be clubbed with the parent having higher income in the subsequent years but only after recieving a notice from the Assesing Officer informing abt the change ( i doubt wheter i will ever get a notice from the AO abt the change)

S S Dahale ( Agri and business) (439 Points)
Replied 22 December 2015

What policy and prcatise should bank adopt in case of interest on FD's held by a minor ( having PAN No. too)

should bank deduct TDS ( as is being above Rs.10000) in the name of a minor child -mentioning his PAN No. or by mentioning his either of parent's PAN No.

*(who also have FD's with that bank), for that BANK is also going to deduct TDS