Mr. and Mrs. Raju have 7 children. Their income under the head 'profits and gains from business or profession' of ₹ 3,00,000 and ₹ 4,00,000 respectively during the previous year 2020-21. (i) 1st child aged 26 years is a

Computation of Taxable Income of Mr. and Mrs. Raju for AY 2021-22 Particulars Mr. Raju (₹) Mrs. Raju (₹) Income from House Property Income of 4th Child: loss from house property (30,000) Income from Business and Profession Business Income 3,00,000 4,00,000 Add: Income of 5th Child Interest from partnership firm (Assumed upto 12% p.a.) 40,000 Share of profit [exempt u/s 10(2A)] Nil Less: Exemption u/s 10(32) (1,500) 4,38,500 Income from Capital Gain Income of 6th Child: Long term capital gain (Exemption u/s 10(32) can be claimed once per minor) 25,000 Income from Other Sources Income of 2nd Child Interest income 8,000 Less: Exemption u/s 10(32) (1,500) 6,500 Income of 6th Child Interest on debenture (10,000-200) 9,800 Less: Exemption u/s 10(32) (1,500) 8,300 Income of 7th Child: Interest on Fixed Deposit 500 Less: Exemption u/s 10(32) (500) Nil Gross Total Income 3,00,000 4,48,300 Less: Deduction u/s 80DD Nil (75,000) Total Income 3,00,000 3,73,300 Note: The clubbing provision of section 64(1A) shall not apply where The income arises or accrues to the minor child due to any manual work done by him; or The income arises or accrues to the minor child due to his skill, talent, specialized knowledge or experience; or The minor child is suffering from any disability of nature as specified u/s 80U. Income shall be first computed head wise in the hands of recipient and then clubbing shall be carried out head wise. Income of the 1st Child shall not be clubbed with the income of Mrs. Raju as he is a major. Income of grandchild (son of 1st Child) will be clubbed with the income of his parent. Section 64(1A) includes a minor married daughter also for the purpose of clubbing of income. However any income arise or accrued to the minor child due to her own skill and talent shall not be clubbed. Hence interest income earned from the fixed deposits made out of such singing income shall be clubbed, as such interest income does not arise to 2nd child on account of her own skill and talent of singing. Income of the 3rd Child shall not be clubbed with the income of Mrs. Raju as she is suffering from disability u/s 80U. It is assumed that Mrs. Raju is not claiming benefit u/s 115BAC otherwise exemption u/s 10(32) will not be allowed for clubbing of minor's Income. Income of 4th Child shall not be clubbed with the income of Mrs. Raju as the income earned out of his physical and mental efforts and will be taxable in his own hand.