Clubbing of income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 October 2011
a minor earn a income of rs 100000 by applying his skills and than he invested the same into debentures of a company. he earns interest of rs 15000 on invested in a debenture. whether this interest income of rs 15000 would be clubbed in the hands of a parents or not.

CA RICHA BADALIA

CA RICHA BADALIA (Expert)
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15 October 2011 Rs.100000 will be taxable in minors hand as it was earned by applying his skills.Rs 15000 earned will be taxable in hands of parent whose total income is higher (excluding this income)subject to a deduction of Rs. 1500 .

Querist : Anonymous

Querist : Anonymous (Querist)

15 October 2011 but clubbing is not applicable on any income which arises on accretion

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CA RICHA BADALIA

CA RICHA BADALIA (Expert)
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15 October 2011 As the income is earned by minor it will be clubbed.

Querist : Anonymous

Querist : Anonymous (Querist)

16 October 2011 conclusion of this query is
All the income earned ( not using his skills ) and income on investment ( whther investment made out of the income earned by using his skills or without using his skills ) by the minor will be clubbed with the income of parents whose total income higher (excluding this income)

CA RICHA BADALIA

CA RICHA BADALIA (Expert)
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16 October 2011 Yes ,correct.

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ACMA Obulirajan R

ACMA Obulirajan R (Expert)
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16 October 2011 Income derived by a minor child out of skill and talent or by way of salary and wages shall not be clubbed. However, if such income is invested and income is earned thereon, such income shall be clubbed.

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Querist : Anonymous

Querist : Anonymous (Querist)

16 October 2011 thanks mam for make my doubt clear

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