Clubbing of a minor child's income under section 64(1A): a minor who sings at concerts (as set, 1961 Act, AY 2019-20)

Readings

The question does not say whether Kiran's earnings come from her own skill or talent. Singing at concerts is performance by the singer herself, so it is read as income from an activity that applies her own skill and talent; the result if it is not is given at the end.

Who is assessable for Kiran's income

The income of a minor child is clubbed with a parent's income, but not income that arises to the minor from manual work done by the minor or from an activity involving the application of the minor's own skill, talent or specialised knowledge and experience (proviso to section 64(1A)). Kiran's ₹65,000 from singing at concerts falls within that proviso. So it is not clubbed with either parent: it is assessable as Kiran's own income for assessment year 2019-20. The business incomes of Mr. Suresh (₹5,89,000) and Mrs. Rekha (₹6,58,000) stay as they are.

The provisions of section 64(1A)

1. General rule: in computing the total income of an individual, all income that arises or accrues to his or her minor child is included.
2. Exceptions: income of the minor from manual work done by the minor, or from an activity involving the minor's own skill, talent or specialised knowledge and experience; and all income of a minor child who suffers from a disability of the kind specified in section 80U.
3. Which parent (Explanation to section 64(1A)):
   • while the parents' marriage subsists, the income is included with the parent whose total income, before including it, is greater;
   • where the marriage does not subsist, with the parent who maintains the minor in the previous year;
   • once included with one parent, the income of later years is not included with the other parent, unless the Assessing Officer, after giving that parent an opportunity of being heard, is satisfied it is necessary.
4. Exemption: the parent with whom the income is clubbed is exempt on up to ₹1,500 for each minor child whose income is so included (section 10(32)).

If her income were clubbed

If the ₹65,000 were not from her own skill or talent, it would be included with the parent whose total income is greater: Mrs. Rekha (₹6,58,000 against ₹5,89,000). She would add ₹65,000 − ₹1,500 = ₹63,500, and her total income would be ₹7,21,500.