Raising children is a significant financial responsibility and one that can be especially challenging for working parents. In recognition of this fact, the Income Tax Act provides for an exemption for the income of minors included in the hands of parents. Under Section 10(32) of the Act, the income of each minor is currently exempt up to a limit of Rs. 1,500.
However, the average expenditure to meet the costs of a minor's education, health, and living expenses has risen significantly in recent years. The current limit of Rs. 1,500 is woefully inadequate to cover these expenses. It is suggested that this limit be raised to at least Rs. 10,000 for each minor child.
This increase in the exemption limit would provide much-needed relief to working parents and help to ensure that minors are able to receive the education, health care, and other necessities they need to thrive. It is also in line with the general inflation and cost of living increase, which has risen since the time the limit was fixed.
In conclusion, raising the exemption limit for income of minors under Section 10(32) of the Income Tax Act would provide a much-needed financial boost to working parents and help ensure that their children have the resources they need to succeed. It is a suggestion worth considering while rationalizing the provisions of direct tax laws.