Section 10(32) Exemption towards income of minor clubbed under section 64(1A) of Income Tax Act, 1961
Exemption under section 10(32) of the Income Tax Act comes into play only when the income of a minor child is clubbed (i.e., added) into the income of his parent in terms of section 64(1A). The exemption provisions of section 10(32) are covered under the present article.
Provisions of section 10(32) of the Income Tax Act, 1961
Exemption under section 10(32) is available in case the income of a minor child is clubbed in the total income of his parent as per provisions of section 64(1A). As provisions of section 64(1A) and section 10(32) are interconnected, we need to understand the basics of section 64(1A) of the Income Tax Act.
As per section 64(1A), the income earned by the minor is required to be clubbed in the total income of the parent whose income is higher. However, income earned by the minor on account of any manual work carried out by him or income earned by carrying on the activity which involves the application of skill or talent of the minor is not included/ clubbed.
Thus, in case the income of minor is clubbed in the total income of the parent as per section 64(1A), then the parent with whom the income is clubbed would be eligible to claim exemption available under section 10(32).
Amount of exemption available under section 10(32) of the Income Tax Act–
The minimum of the following amount is available as an exemption under section 10(32)–
1. INR 1,500 per minor child; or
2. Amount of income included/ clubbed in the income of the parent.
Understanding exemption under section 10(32) with the help of illustration-
Suppose,
- A being a banker, is earning a salary income of INR 5,00,000, and Mrs. A is a house wife.
- Son of Mr. A, who is 10 years old (i.e., minor), earned interest income of INR 10,000, whereas, daughter of Mr. A, who is 5 years old (i.e., minor), has earned interest income of INR 8,000.
- As per provisions of section 64(1A), the interest income earned by both, the son and the daughter, would be clubbed in the total income of Mr. A.
- Likewise, the exemption available under section 10(32) would be INR 3,000 (i.e., INR 1,500 for each child). Mr. A’s net taxable income would be-
| Salary income | INR 5,00,000 | |
| ADD | Interest income of son | INR 10,000 |
| ADD | Interest income of daughter | INR 8,000 |
| LESS | Exemption as per section 10(32) | (INR 3,000) |
| Net Taxable Income | INR 5,15,000 |
Table – Articles on Section 10 Exemptions
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How to Claim Minor Child Income Rebate of Rs. 1500/- under section 10 (32) in ITR 3 for assessment year 2021-2022.
In which part of ITR 3 this have to be entered
Kindly reply.
Same query, how to claim rebate of Rs. 1500/- for income of minor child under section 10 (32) in ITR 2 for assessment year 2021-2022. Not clear where is the provision in the ITR form. please help
Same query, how to claim rebate of Rs. 1500/- for income of minor child under section 10 (32) in ITR 2 for assessment year 2021-2022. Not clear where is the provision in the form. please help
How to claim rebate of Rs. 1500/- for income of minor child under section 10 (32) in ITR 2 for assessment year 2021-2022.
Kindly reply.