What are the tax implications for a minor account?

A minor can earn only two types of income from investments: capital gains and dividend income. As per tax laws, any income earned by a minor is generally clubbed with the income of the parent whose total income is higher. The parent is then liable to pay tax on the combined income. However, an exemption of ₹1,500 per child per financial year is allowed. Once the minor attains majority, the income is taxed in their individual capacity.