Ashish M (Chartered Accountant) (2731 Points)
02 February 2010
Pls clarify the problem below:
A minor earned Rs.25 lacs from acting skills. This Rs.25 lacs is invested by him in a house property.
The house property is put on a rent of Rs.2 lacs yearly. From this amount of Rs.2 lacs, a motor car is purchased,.
Pls clarify the above transactions under both Income tax and wealth tax act. Assume all transactions are effected by 31.03.2009.
Amir
(Learner)
(4016 Points)
Replied 02 February 2010
Dear Ashish,
Income Tax
Rs. 25 Lakhs - Taxable in the hands of Minor
Rs. 2 Lac - Rental Income shall be clubbed in the hands of parent. (Exemption of Rs. 1,500 can be claimed)
Wealth tax
House - Taxable in the hands of Minor but again exemption in respect of one House can be claimed
Car - Clubbed with the parent.
Ashish M
(Chartered Accountant)
(2731 Points)
Replied 02 February 2010
Dear Amir,
Pls tell Y the income of Rs. 2 lacs is clubbed with parents when the source of this income is deemed to be that of the minor himself.!?????
Amir
(Learner)
(4016 Points)
Replied 02 February 2010
Dear Ashish,
Simple brother, Rental income does not fall in any of the proviso to Sec 64(1A) -
Sec 64[(1A) In computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child 56[, not being a minor child suffering from any disability of the nature specified in section 80U] :
Provided that nothing contained in this sub-section shall apply in respect of such income as arises or accrues to the minor child on account of any—
(a) manual work done by him ; or
(b) activity involving application of his skill, talent or specialised know-ledge and experience.
Ashish M
(Chartered Accountant)
(2731 Points)
Replied 03 February 2010
amir,
thanks for the useful explanation..!!!!!!!!
CAclubindia
