12 April 2013
For first time Minor Account is clubbed to parent who's income is highest. I just want to know that whether the highest income is gross taxable or net taxable.
Example if Husband's gross income is 3 lakh and net income is 2 lakh and wife's gross income is 2.5lakh and net income is 2.25 lakh then the son's account should be clubbed in husband or wife's account?
12 April 2013
As Seeing Section 64 1(A) there is no where specified whether it is gross taxable or net taxable Initially My Accountant said that it will be clubbed in Wife's account. Now he is saying that it will be clubbed in Husband's account. i.e. Gross Taxable income should be taken for comparision. Please guide me and if any website link is there which states that it is nett taxable income then give me the link.
12 April 2013
According to the section 64(1A) of the income tax act,1961 Minor child's income shall be clubbed in the hands of parents "Where the marriage of the parents subsist, the income of the minor child shall be included with the income of that parent whose total income(total income Underlining point),excluding the income to be clubbed,is greater. In case, where the marriage of the parents does not subsist,the income of the minor child will be included in the income of the parent who maintains the minor child in the previous year."
Thus according to the above explanation minor's income shall be clubbed in the hands of parents whose total income is high.
I above said "total income" is underlining point. So we all know Total income means the income on which we paying tax i.e income after deduction of all eligible deductions like Chapter VIA deductions,set off etc.... from gross total income. Thus in your case in the hands of wife the minor's income shall be clubbed.
12 April 2013
Dear Sir Below defination Of Section 5 does not clearly specify any deductions.
Scope of total income. 5. (1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which— (a) is received or is deemed to be received in India in such year by or on behalf of such person ; or (b) accrues or arises or is deemed to accrue or arise to him in India during such year ; or (c) accrues or arises to him outside India during such year :
Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6)* of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India.
(2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-resident includes all income from whatever source derived which— (a) is received or is deemed to be received in India in such year by or on behalf of such person ; or (b) accrues or arises or is deemed to accrue or arise to him in India during such year.
Explanation 1.—Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India.
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