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

Kiran, a resident individual, gifted ₹10,00,000 to his minor daughter, who earned ₹12,000 as interest on a bank deposit and ₹50,000 from a stage performance using her own talent. Kiran's income is higher than that of his wife. What amount will be clubbed in Kiran's total income for tax year 2026-27 before any exemption for the minor's income?

Only ₹12,000 is clubbed with Kiran's income. The interest on the deposit is minor's income and goes to the parent with the higher income, while the ₹50,000 earned through the child's own talent is excluded from clubbing and taxed in the child's hands.

  1. A₹12,000Correct
  2. B₹62,000
  3. C₹50,000
  4. DNil

Explanation

Minor child's income is clubbed with the parent having the higher income. However, income from manual work or from an activity involving the child's own skill, talent or specialised knowledge is not clubbed. So ₹50,000 is excluded and only ₹12,000 interest is clubbed. Option ₹62,000 wrongly includes the talent income.

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