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May 31, 2021

When Minor Income is Not clubbed with parents?

by Mahesh Mara in Income Tax

When Minor Income is Not clubbed with parents?

Section 64(1A) deals with clubbing of minor child income. As per section 64(1A) The income of minor child will be clubbed in the income of that parent (mother/father) whose total income is greater. In this article we will know about situation when minor child income shall be clubbed and situation when minor child shall not be clubbed.

When does income of minor child will be clubbed?

As per section 64(1A) The income of minor child will be clubbed in the income of that parent (mother/father) whose total income is greater.

If the income of the minor child is once included in the total income of either parent, any such income arising in any subsequent year shall not be clubbed in the total income of the other parent, unless the Assessing Officer is satisfied, after giving an opportunity of being heard to that parent, that it is necessary so to do.

If the marriage of the parents does not subsist then the income of minor child will be included in the income of that parent (mother/father) who maintains the minor child (guardian of the minor child) in the relevant previous year.

Where both the parents of the minor child are not alive, the income of the minor child cannot be assessed in the hands of any other relatives (including grandparents) or even in the hands of a minor.

When does income of minor child shall not be clubbed in hands of parent?

The following situations income of a minor child shall not be clubbed in the hands of his/her parents and will be taxable in the hands of the minor himself/herself:

  • Any income earned by a minor child who is suffering from any disability specified in section 80U of the Income Tax Act like physically disabled, totally blind, etc.
  • Any income earned by the minor child on the account of any manual work done by him/her.
  • Any income earned by the minor child on account of any activity involving the application of his/her skills, talent or specialized knowledge and experience.

How much deduction shall the parent shall get for clubbing of minor income?

As per section 10(32), Where the minor child’s income has been clubbed in the total income of his/her parent, such parent will be entitled to an exemption to the extent of such income or Rs. 1,500 whichever is less, in respect of each minor child whose income is so included.

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