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CMA Intermediate · Direct and Indirect Taxation · Clubbing of Income

Mr. Arora and Mrs. Arora are married and living together. Their total incomes before clubbing are Rs 9,00,000 (Mr. Arora) and Rs 6,00,000 (Mrs. Arora). Their minor son earned Rs 40,000 interest on a bank deposit. The income of the minor son will be included in the total income of:

The Rs 40,000 is included in Mr. Arora's total income. Where the parents' marriage subsists, a minor child's income is clubbed with the parent whose total income before such inclusion is greater, and Mr. Arora's Rs 9,00,000 exceeds Mrs. Arora's Rs 6,00,000.

  1. AMr. Arora, because his total income is greaterCorrect
  2. BMrs. Arora, because her income is lower
  3. CBoth parents equally, Rs 20,000 each
  4. DThe minor son alone, as he is a separate assessee

Explanation

Under section 99(5)(b)(i), where the parents' marriage subsists, the minor's income is included in the income of the parent whose total income before inclusion is greater. Mr. Arora's Rs 9,00,000 exceeds Rs 6,00,000, so the full Rs 40,000 is clubbed with his income.

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