Income Tax Act, 1961 Section 64(1A): Tax on the Income earned by Minor.
Note:In Computing the total Income of any Individual, there shall be clubbed all such income as arises or accrue to his minor child not being a minor suffering from any disability of the nature specified in Section 80U.
Income of the minor daughter (whether Married or Unmarried) shall be clubbed with the income of partner under section 64(1A).
However there shall be no clubbing in respect of such income as arises or accrue to the minor child on account of any:-
- Manual work done by him; or
- Activity involving application of his skill, talent or specialized knowledge and experience.
- Child is suffering from any disability specified u/s 80U.
The income of Minor Child shall be clubbed or included;
- Where the marriage of his parent subsists, in the income of the parent whose total income (excluding the income of minor) is greater; or
- Where the marriage of his parents does not subsists, in the income of that parent who maintains the minor child in the previous year,
and where any such income is once included in the total income of either parent, any such income arising in any succeeding year shall not be included in the total income of the other parent, unless the Assessing officer is satisfied, after giving that other parent an opportunity of being heard, that is necessary to do so.
Certain Points to Remember:
- Minor Child includes both Step child as well as Adopted Child.
- If both mother and father are dead, there shall be no clubbing of income. The income of minor child will be included in his income and the minor child shall file the return through the legal guardian.
- Where child attains majority during the previous year part of income earned by child during his minor stage shall be clubbed in the hands of Parent.
If income (not included in the income of Parent) earned by minor is invested and income is earned from such investment than such investment income shall be clubbed under section 64(1A) with the Parent income.
Therefore, if a child artist earns Rs. 10,00,000 from acting in a movie, then such Rs. 10,00,000 shall not be clubbed with the income of parent, but if he invests that money into bank and earns interest than the interest shall be included in the income of parent not in the income of minor.