Question

In 2019, Sheryl is claimed as a dependent on her parents' tax return. Sheryl did not provide more than half her own support. What is Sheryl's tax liability for the year in each of the following alternative circumstances? Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates, Estates and Trusts for reference. (Leave no answer blank. Enter zero if applicable.) Problem 8-51 Part-b b. She received $7,000 of interest income from corporate bonds she received several years ago. This is her only source of income. She is 16 years old at year-end.

Answer 1

As per Income Tax Act, 1961.-

If a person who is minor and has some income then it should be clubbed in the hands of his/her parent's income.

In some cases there is no need to club the same. Such cases are-

If income of minor is from his/her special talent then such income would not get clubbed in the hands of parent income.

In the given case,

Sheryl is a minor and her interest income of $ 7000 would get clubbed in the hands of her parents income as per Indian Income Tax Act, 1961.

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