Amit (Project Manager) (33 Points)
04 January 2011Hi,
I want to know if there is any tax benefit in investing nominal amount in my son's name. He is currently 2 year old. I can look at having a PAN card and filing IT return if it makes sense. The idea is to segregate my savings that I do for him and possibly save tax.
Amit
Navneet Garg
(Chartered Accountant)
(70 Points)
Replied 04 January 2011
Dear Mr. Amit,
As per Section 64(1A) of the Income Tax Act 1961, income of the minor child is to be clubbed in the hand of either of his/her parents, however if that income is earned by the child on account of the manual work done by him or from any activity involving application of skills, talent or specialised knowledge or in case of child with disability then income will be taxed in the hands of child only.
Hence if the income is derived by any mode other than above mentioned three cases then it is not advisable to file separate return of the child.
But as a tax planning measure one can form HUF.
CA Sanat Pyne
(F.C.A. & M.COM)
(20102 Points)
Replied 04 January 2011
YOU CAN MAKE A PRIVATE FAMILY TRUST.
DOWNLOAD THE DETAILS ABOUT PRIVATE FAMILY TRUST
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 04 January 2011
you can open a PPF in name of minor and sign as legal guardian, this will be absolute property of minor child, with tax benefits in your hand u/s 80C
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