Generally speaking, the income of a minor child is to be clubbed with the income of the father or the mother, whoever of the two has the higher income. However, a very interesting decision was given by the Supreme Court of India in the case of CIT v. M.R. Doshi 211 ITR 1.
Immediately after the marriage of his son, an assessee can start tax planning for his daughter-in-law. The daughter-in-law should not receive any gifts, directly or indirectly, from her husband, mother-in-law or father-in-law.
Perhaps you have never thought that your own adult children could save you tax. This sounds somewhat unbelievable but the fact is that taking advantage of the provisions of the Income Tax Act, 1961 one can surely save substantial amount of income tax especially by making gifts to one’s own adult children.
It is usually believed, that in view of the various amendments to the Income Tax Act, several restrictions have now been placed on the formation of a Hindu Undivided Family (HUF). Thus, from the point of view of tax planning, it is not possible for a Hindu male to add his self- acquired property into the common assets of the HUF.
Nowadays there are many are working couples and both spouses are income tax payers. The provisions of deduction of tax at source apply to both of them but in some cases it is possible to save through proper tax planning.
Family trusts play a very important role in the practical life of a person. There are special provisions governing the assessment and taxation of trusts and their trustees which are contained mainly in Sections 160, 161,162 & 164 of the Income Tax Act, 1961.
Normally when a person dies, his legal heirs or executors distribute the assets left by the deceased on the date of death. It may happen on many occasions that due to some reason or the other, complete distribution of the assets left by the deceased does not take place.
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