Teen AI prodigy pays father Rs 2 lakh salary each month

Indian Opinion Analysis

India's Income Tax Act requires a minor's income to be clubbed with that of the parent if the child is financially dependent, unless the minor has a genuine disability or owns a business inherited from a deceased parent. Aju's formal employment at his father's firm thus sits in an unusual legal space: the father pays tax on the salary as a business expense, while Aju files a separate return with a lower tax slab. This structure works only if the salary is proportionate to the work done and the minor is demonstrably not a mere conduit. The Income Tax Department has the power to scrutinise such arrangements under the general anti-avoidance rules introduced in the 2016 Finance Act. Aju's next milestone is his Bachelor's in Business Administration admission, which will test whether the setup remains viable once he is legally an adult.