About income from rd

This query is : Resolved

sunil kandoi (Querist)
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20 August 2012 Mr. & Mrs. X have two children. Both child have RD with post office. one RD nominated to Mr. X and other nominated to Mrs. X. In this case what should be treatment of RD interest in income tax return and balance sheet

Ahamed

Ahamed (Expert)
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20 August 2012 ____________________________________________
10.2.7 INCOME OF MINOR CHILD (SEC. 64 (1A)
All income which arises or accrues to the minor child shall be clubbed in the
income of his parent (Sec. 64(1A), whose total income (excluding Minor’s
income) is greater. However, in case parents are separated, the income of minor
will be included in the income of that parent who maintains the minor child in the
relevant previous year.
Exemption to parent [Sec10 (32)]
An individual shall be entitled to exemption of Rs. 1,500 per annum(p.a.) in
respect of each minor child if the income of such minor as included under section
64 (1A) exceeds that amount. However if the income of any minor child is less 148
than Rs. 1,500 p.a. the aforesaid exemption shall be restricted to the income so
included in the total income of the individual.
When Section 64(1A) is not applicable
In case of income of minor child from following sources, the income of minor
child is not clubbed with the income of his parent.
• Income of minor child on account of any manual work.
• Income of minor child on account of any activity involving application of
his skill, talent or specialized knowledge and experience.
• Income of minor child (from all sources) suffering from any disability of
the nature specified under section 80U.

Gaurav Tripathi

Gaurav Tripathi (Expert)
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20 August 2012 In ITR you have two ways:

Either add that in Profit and loss a/c. In schedule BP enter the amount in " Income/ receipts credited to profit and loss account
considered under other heads of income" and then eneter the amount in in Schedule SPI "Income of specified persons(spouse, minor child etc) includable in income of the assessee".

Or directly show the amount in SCHEDULE SPI- "Income of specified persons(spouse, minor child etc) includable in income of the assessee".

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U S Sharma

U S Sharma (Expert)
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20 August 2012 assumed that children are minor,

the income from RD interest would get clubbed to the person who has higher income slab, irrespective of nomination matter.