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CA Intermediate · Taxation · Income of Other Persons included in Total Income of Assessee

Anita, a minor child of Rajesh and Sunita, earned Rs 30,000 from a stage performance using her own talent and Rs 18,000 as interest on a deposit made out of her birthday gifts from relatives. Rajesh's total income is Rs 12,00,000 and Sunita's is Rs 9,00,000. Assuming the exemption for minor's income of Rs 1,500 per child applies where clubbing happens, what amount is clubbed with the parent's income?

Rs 16,500 is clubbed with Rajesh's income. The talent-based income of Rs 30,000 is excluded from clubbing, while the Rs 18,000 interest is clubbed with the parent having higher income, reduced by the Rs 1,500 exemption available for the minor child.

  1. ARs 46,500
  2. BRs 16,500Correct
  3. CRs 48,000
  4. DRs 18,000

Explanation

Income from the minor's own talent or skill (Rs 30,000) is not clubbed. Interest on deposit from gifts (Rs 18,000) is clubbed with the parent having the higher total income, Rajesh. After the Rs 1,500 exemption, Rs 16,500 is clubbed. Rs 46,500 wrongly includes the talent income before exemption adjustments.

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