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Clubbing of income

CA NEHA AGARWAL (Practise) (227 Points)

12 July 2012

Hello Friends,

I want to know if someone gifts a certain amount to a minor child then whether the same will be clubbed with his parents or not? Please do attach the source with your reply.

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3 Replies

Nitesh ujjwal (ARTICLE ASSISTANT) (41 Points)
Replied 12 July 2012

Dear Neha,

We assumed that gift received from a person other than relative. As per sec. 64 (1A) Gift received by minor child shall be clubbed in the hands of in his parents because all income earned other than by way of

1. manual work done by him or

2. activity involving application of his skill, talent or specialised knowledge and experience.

shall be clubbed in the hands of parents.

Income on gift received shall also be clubbed.

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Pratti.Ravi Teja (AML EXECUTIVE) (22 Points)
Replied 12 July 2012

THANK U SO MUCH

veerkar (none) (43 Points)
Replied 12 July 2012

Originally posted by : Pratti.Ravi Teja
	THANK U SO MUCH

Even if the gift is received from a relative it will be clubbed with the parent - that too that parent who has higher income. And I assume that you understand what clubbing is. e.g. if the minor receives say 50000 rupees as gift then 50000 itself is not added to his parent's income but any income earned out of investment from investment of that 50000 is added to his income.