Queries & answers

IF THE PARENTS ARE DIVORCED OR LEGALLY SEPARATED , IN WHOSE HANDS IS THE INCOME OF THEIR MINOR-CHILD TO BE INCLUDED .

In such cases, the income arising to the minor-child will be assessed in the hands of that parent who maintains the minor-child in that year.

IF IN ANY SUBSEQUENT YEAR THE INCOME OF THE OTHER PARENT BECOMES GREATER, WILL THE INCOME OF THE MINOR-CHILD CONTINUE TO BE ASSESSED IN THE HANDS IT WAS FIRST ASSESSED ?

No. It has to be assessed in the hands of the parent whose total income in the first year of clubbing was greater. However, this status can be varied by the Assessing Officer if he is satisfied that it is necessary to do so after giving that parent an opportunity of being heard.

IS INCOME FROM "SHARES" BOUGHT BY AN INDIVIDUAL OUT OF HIS OWN FUNDS BUT INVESTED IN THE NAME OF HIS WIFE, TO BE TAXED IN HIS HANDS ?

Yes.

IS THERE ANY INCOME EXEMPTION AVAILABALE TO THE PARENT IN WHOSE HANDS THE INCOME OF A MINOR CHILD IS CLUBBED?

Yes. As per Section 10(32) of the Act such parent can claim a sum of Rs.1500/-as exempt for each minor child whose incomes are clubbed in his hands provided the income clubbed per minor child exceeds Rs.1500/-.