New Delhi, Sept. 12 -- A Rs.1.17 crore interest income earned by a minor led to a Rs.12.83 lakh penalty for his father, even though the income declared in the man's income tax return (ITR) matched the income assessed by the tax department.

The dispute centred on whether the father could claim a reduced tax rate under the India-UAE double taxation avoidance agreement (DTAA). The taxpayer from New Rajendra Nagar in the national capital had declared an income of Rs.8.43 crore in his return filed on November 4, 2022.

However, on March 22, 2025, the income tax assessing office (AO) from Jhandewalan opened the assessee's file and modified the tax rates applicable to the Rs.1.17 crore interest income earned by his minor child. The earnings wer...