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
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.
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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