Income accruing to a minor is clubbed with higher-earning parent’s
Pratip Kar
As per Section 2 (42A) of the Income Tax Act, 1961, if an asset is received by way of inheritance, the period of holding of the previous owner will also be taken into account in determining whether the asset is a long-term or a short-term capital asset. As such, your holding period will be calculated from the period for which it has been held by your father. As such, the gains arising on sale of shares will be treated as long-term capital gains and be eligible for tax exemption under Section 10(38) provided they are sold through a recognised stock exchange and the securities transaction tax is paid on such sale.
I have a minor daughter in whose name there is a fixed deposit for R1 lakh, which was made from a gift received from her grandfather. An annual interest of R9,000 is being earned on the FD. Will this income be clubbed in my hands?
Vinay Kumar
As per the provisions of Section 64 (1A), the income accruing to a minor child will be clubbed with the income of the either of the parent whose total income is greater than the other (excluding the income to be clubbed). As such, the income of R9,000 will get clubbed in your hands (assuming you
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