Clubbing provisions of minor’s income in case of a divorce:

 

Introduction:

1. Under the Income Tax Act, 1961, a minor’s income is generally clubbed with the income of the parent under Section 64(1A), whose total income is higher.

2. An exception is made if the minor has a disability (as per Section 80U) or the minor earns income through their own skills or talent.

Now the question arises, how would the clubbing provisions work in the case of divorced parents?

1. The minor’s income would be clubbed with the parent who has custody of the child.

2. The higher-earning parent rule does not apply in this case.

3. The custodial parent can claim an exemption of Rs. 1,500 per minor child under Section 10(32).

4.If income is clubbed, the custodial parent files ITR including the minor’s income.

5. If the minor’s income is taxed separately, the custodial parent files ITR on behalf of the minor as a guardian.