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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Tax Provisions for Special Cases

Caselet: Meera, a resident individual aged 35, earns Rs 12,00,000 as salary. Her minor son has earned Rs 14,000 interest from a bank deposit, and her other minor daughter has earned Rs 6,000 interest from a deposit. Both children's incomes are on their own deposits arising from gifts from relatives, and the parents are not separated. Meera's income is higher than her husband's. Assuming the per-child exemption is Rs 1,500 under clubbing of minor's income (old regime), what amount is added to Meera's total income?

Rs 17,000 is added to Meera's income. The minors' incomes total Rs 20,000, they are clubbed with the higher-earning parent, and an exemption of Rs 1,500 per child (Rs 3,000 in all) is deducted from the clubbed amount.

  1. ARs 20,000
  2. BRs 17,000Correct
  3. CRs 14,000
  4. DRs 3,000

Explanation

Minor's income is clubbed with the parent having the higher income, which is Meera. Total is 14,000+6,000=20,000. Exemption of Rs 1,500 is allowed per child, so 3,000 is deducted in all. Clubbed amount = 20,000-3,000 = Rs 17,000. Rs 20,000 forgets the exemption.

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