Skip to content

CMA Intermediate · Direct and Indirect Taxation · Clubbing of Income

Under the Income-tax Act, 2025, the income of a minor child is included in the total income of an individual parent. Which of the following incomes of the minor child is NOT included in the parent's total income?

Income from an activity in which the minor child applies his own skill, talent, specialised knowledge or experience is not clubbed with the parent's income. Passive income such as interest, dividend or rent on assets held by the child is clubbed under section 99(1)(c).

  1. AInterest on a fixed deposit made from gifts received from relatives
  2. BIncome from a business activity where the child's skill and talent are appliedCorrect
  3. CDividend on shares held in the child's name
  4. DRent from a house property gifted to the child

Explanation

Section 99(1)(c) excludes income arising from work done by the child, or from activities where the child's skill, talent, specialised knowledge or experience is applied, or where the child has a specified disability. Interest, dividend and rent arise from assets and are therefore clubbed with the parent's income.

Did you get it right without looking?

One question tells you little. A timed set on Clubbing of Income shows your real accuracy, how long you take and where you lose marks.

Practise Clubbing of IncomeFree diagnostic mock

More Clubbing of Income questions