We often receive questions about tax liability of a person in case of any income that accrues or is paid to a minor. Whether it is the minor’s own tax liability or the income of the minor should be clubbed with his father’s income or his mother’s income or the income should be divided into two parts and proportionately clubbed with the income of both the parents for calculation of income tax etc.
Section 64(1A) of income tax act clarifies on above matters. The said section provides that any income that accrues or is paid to a minor is added to the parent’s income and such person will be taxed just like that his/her own income. (However, the parent can claim an exemption of Rs.1, 500/- under section 10(32) of IT act for each minor child where income is clubbed with his/her income.)
The IncomeTax act clarifies to the above question with whose income minor’s income to be added for income tax calculation purpose. The details are as under.
Another question; is it alright if one of the parents of the minor to submit form 15 G with the bank since his/her income is below the taxable income?
In view of the clarifications provided above, we may conclude that whoever has to pay tax as per income tax rule shall submit form 15G if eligible, not anybody else.
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