CAF-2 · Chapter 12 · Question 4 of 15
A 15-year-old minor child earns Rs. 800,000 from a retail business that his father started for him with gifted capital. The father has a taxable income of Rs. 2,000,000, and the mother has a taxable income of Rs. 3,000,000. How will the minor's business income be taxed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) It will be added to the mother's taxable income since she has the highest taxable income.
Explanation
Any income of a minor child chargeable under the head "Income from Business" shall be chargeable to tax as the income of the parent with the highest taxable income for that year (unless the business was acquired by the child through inheritance).
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