The income of minor children is required to be clubbed with income of the parent, whose income is higher. The following are the exceptions:

(i) Income of minor child on account of any activity involving application of his skill, talent or specialised knowledge or experience, such as child dancers, singers, dramatist, artists performing for TV, Radio and Films, Computer operating children may be included in such categories. The wage earning self employed children will also come in the purview of these categories;

(ii) the income of a physically handicapped minor child;and

(iii) income of minor child from any manual work done by him.

Exemptions –

As per section 10(32), out of the income clubbed under the new provisions, deduction of income upto Rs. 1500 per child will be allowed. Thus, if the income of any minor child is less than Rs. 1500, the same will not be clubbed, but if the income is more than Rs. 1500, amount in excess of Rs. 1500 will only be clubbed. However, no similar deduction has been provided for the purpose of wealth tax.

The amount of exemption under section 10(32) fixed at Rs. 1500, has become redundant and should be revised it to atleast Rs. 10000 to make it meaningful, considering the inflation cost.