Provisions Related to Clubbing of Minor’s Income

A lot of misconceptions endure among the assessees about the provisions of clubbing of income. There is a possibility of cut the tax burden by spreading the income to all family members. To control such practices, certain provisions to have been made for clubbing of income of wife, son’s wife and minor children. However, in this article we will point only the provisions of clubbing of income comes under section 64 (1A) provision related to clubbing of Minor’s income.

Under section 64(1A) of the act, all income accruing or arising to a minor child is to be included in the income of his parent. The clubbing provision will not apply to a minor child suffering from any of the disabilities specified in section 80U.

However, the income derived by minor from manual work or from any activity involving application of his skill, talent or specialised knowledge or experience will not be so included in the parent’s income.

Where any income of minor is included in his parent’s income, such individual shall be entitled to deduction of Rs.1500 or income of such minor child includible in parent’s income, whichever is lower. This deduction  is available in respect of each minor child.

The income of the minor will be included in the income of that parent whose total income is greater. However, where the marriage of the parents does not subsist, the income of the minor will be includible in the income of that parent who maintains the minor child in the relevant previous year

Where any such income is once included in the total income of either parent, any such income arising in any succeeding year shall not be included in the total income of the other parent unless the Assessing Officer is satisfied, after giving that parent an opportunity of being heard, that it is necessary to do so. the minors income, in case both the parents are not alive, cannot be assessed in the hands of the grant parents or any other relatives or even in the hands of minor.

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