Skip to content

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

Rajesh Menon's minor daughter Ira (aged 12) lives with him, and his total income is higher than that of his wife. In tax year 2026-27 Ira earned Rs 60,000 as prize money from a television singing talent show, which she won through her own special skill, and Rs 40,000 as interest on a fixed deposit made out of cash gifted by her grandparents. Ignoring any small statutory exemption on a minor's income, what amount is included in Rajesh's total income on account of Ira?

Rs 40,000 is clubbed in Rajesh's hands. A minor child's investment income is added to the income of the parent with the higher total income. Income earned by the child through own skill or talent, such as the singing prize, is not clubbed and is taxed in the child's own hands.

  1. ARs 1,00,000
  2. BRs 40,000Correct
  3. CRs 60,000
  4. DNil

Explanation

Income of a minor child is clubbed with the income of the parent whose total income is higher. The exception is income earned by the minor through manual work or an activity involving skill, talent or specialised knowledge. The Rs 60,000 prize money comes from Ira's own talent, so it stays in her hands. Only the Rs 40,000 interest on the investment is clubbed. Rs 1,00,000 wrongly clubs the skill-based income as well.

Did you get it right without looking?

One question tells you little. A timed set on Income of Other Persons included in Total Income of Assessee shows your real accuracy, how long you take and where you lose marks.

Practise Income of Other Persons included in Total Income of AssesseeFree diagnostic mock

More Income of Other Persons included in Total Income of Assessee questions