Minor's Income

In this scenario, the amount won't be added to the parent's income. To qualify as tax-free under Section 10 (32) of the Income Tax Act, the income should not exceed ₹1500/- per child, with a maximum limit of two minor children. This income may include funds transferred by a parent, grandparent, or any other individual.

Example:

Suppose a parent receives ₹1,200 as interest income earned in the name of their minor child from a bank deposit. Since this amount is below ₹1,500, it qualifies for exemption under Section 10(32) and will not be added to the parent’s taxable income.

If the minor child earns ₹2,000 instead, then only ₹1,500 is exempt, and the remaining ₹500 will be included in the parent’s income and taxed accordingly.