15 April 2008
The income of 'C' a child who is a minor male is to be clubbed with 'M' his mother who is below 65 years for the financial year 2007-08.The income is Rs.145900/-.
The basic exemption for a male assessee for the above year is 110000/- and for a female assessee is 145000/-.Had the income been assessed in the hands of the child he would have been taxed on Rs. 35900.But after clubbing, there is no tax that is Rs. 145900-1500=144400.The mother has no other income. Is this calculation correct?
15 April 2008
Ha Ha.. Very interesting question, but your interpretation is wrong...!!
You assumed that if child would have been major, income would have been over and above the exemption limit. Tell me one thing if we can asume in the above manner, why can't we assume that income of C is Rs. 150000/- (AY 2007-08), and if he would be a senior citizen his limit would have been Rs. 185000/- (Ay 2007-08)????? Try to answer this question.
Answer to your question is in the above questipon itself.
In the eyes of income tax minor child means simply a minor child (includes both males and females)like it has no such diffrentiation in case of senior citizens..
.. Moreover if this would have been the case, it would be a very good tax planning for fathers having minor female child... isn't it? So income tax will never allow such a thing.
30 May 2008
Dear Shreyans, You did not get my question correctly.When I mean to say"Had the income been assessed in the hands of the child he would have been taxed on Rs. 35900" here I mean to say that had he earned it by application of his intellectual and or physical abilities, it would have been taxable in his hands and not clubbed.Right? If the child was a major or a senior citizen,his income as it is would not be clubbed with that of his parents or guardian unless he was of unsound mind or a lunatic.So your questions are out of place. Thaks for the reply.
CAclubindia
