Deduction u/s 80c - Minor

[DEV KUMAR KOTHARI]

Query for discussion Can deduction u/s 80C be claimed separately in hands of minor whose income is clubbed with one of parent u/s 64? My view: yes, because on reading of S. 64(1A) we find that 'total income' / such income of minor is to be clubbed, total income means GTI minus deductions under chapter VIA. There are some decisions of ITAT, Kolkata in favor of assessee. For example in case of Harish Khetan V ACIT ITA No. 2029/Cal/ 1996 for AY. 1993-94 order dt. 19.10.2001 passed by SMC Bench and then followed by other benches. Readers may refer to my articles in Taxmann on this issue. Readesr are also requested to submit query and own views, with reference of relevant provisions and case laws, as illustrated above to make this forum really "DISCUSSION FORUM". Readers views are soliceted.

[Rama Krishana]

The provisions of section 64(1A) provides that "all such income" of the minor to be included. In my view the term "all such income" can not be equated with the term "gross total income" or "total income". Therefore, I differ with your views. Will you please publish your said letter on this website for more study and context in which you have considered that before inclusion of minor's income, deduction under chapter VIA like section 80C to be deducted before making addition under section 64.

[DEV KUMAR KOTHARI]

In computing the total income of any individual, there shall be included all such income as arises or accrues.... The words'such income' is after 'total income', therefore it means total income. Read the following articles fro indepth study: Minor - A separate assessee [2006]155 TAXMAN 51 (ART) [2003]129 TAXMAN 33 (ART) Tax literature/personal taxation Minor Child’s Income - Some Aspects [1996] 89 TAXMAN 374 (ART) TAX LITERATURE/CLUBBING PROVISIONS MINOR CHILD'S INCOME/LOSS - SOME MORE ASPECTS AND CLARIFICATIONS [1996] 85 TAXMAN 252 (ART) TAX LITERATURE/PERSONAL TAXATION MINOR CHILD'S INCOME/LOSS - SOME ASPECTS

AI Summary

Deduction under section 80C is contested: whether a minor's deductions apply before income is clubbed under section 64(1A) is contested.
Whether a minor may claim Chapter VIA deductions before its income is aggregated under the clubbing provision is disputed. One position treats the minor as a separate assessee entitled to deductions so that a net amount is clubbed with the parent; another reads the clubbing phrase "all such income" as requiring inclusion of the minor's income without prior Chapter VIA deduction, making the issue one of statutory interpretation and sequencing of tax computation.