If The Income By Minors Are Taxable?

Do minors have to pay taxes?

Yes, under section 64(1A), any income that is earned by or paid to a minor is included in the parent’s income and is subject to taxation in the same manner as the parent’s income.

A minor is somebody who is under the age of 18. Savings in a bank account, fixed deposits, or other investments done in their name by the parents are ways for minors to make money.

If the minor’s income is less than Rs. 1,500, it is not included in the parent’s income.

For each minor child whose income is combined, the parent is eligible to claim an exemption of Rs. 1,500.

When both parents are working, the income of the minor is added to the income of the parent with the higher income.

In the event of a divorce, the parent who has custody of the child adds the minor’s income to their own.

The minor’s income is not combined with the guardian’s if both parents are deceased; instead, a separate income tax return is made.

To this, there are some exceptions.

Minor must submit an income tax return if they get money from any type of labor or from an endeavor that requires them to use their specific skills or expertise. similar to how a Masterchef Junior champion would be responsible for his The income of a kid who has one of the disabilities listed in Section 80U will not be combined with the parent’s income. When a person experiences more than 40% of any of these conditions—blindness, poor vision, hearing impairment, loco movement dysfunction, and mental illness—they are deemed differently abled.

A PAN card may be held by a minor.

There are certain rules for including a minor’s income in his/her parent’s assets:-

If both the parents are receiving income, then the income of the minor will sum up with the parent’s income and especially for the parent whose income is greater.

In the case of divorced parents, the income of the minor is added to the income of the parent who has custody.

If the minor is an orphan, then, in this case, a separate income tax return is needed to be filed. A guardian can’t get the salary inclusion benefit from this.

If a child is disabled, then the income of a child will not be added to the income of the parent under Section 80U of the Income Tax Act 1961. A child is considered disabled when the minor has more than 40% disability due to diseases like mental illness, locomotor disability, hearing impairment, poor vision, and blindness.

If a minor earns any income using his specialized skills, talent, knowledge or manual work, then such income earned will be taxable to the minor himself

Who can sign the ITR on behalf of a Minor?

Section 140, 159, 160 etc. of the Income Tax Act, 1961 envisages many situations where a person would not be able to attend to their Income Tax related affairs on their own. In such cases, their guardian or any other competent person can act on their behalf with specific authorization. For a minor, the Guardian or Manager who is managing the affairs of such person may be registered as their ‘representative’

If the Guardian or Manager of the minor meets the requirements, they will have to register as a ‘representative assessee’ by logging in to the income tax website and uploading the specified documents to prove their credentials. Once your request is approved and you are registered, they can file the returns of the minor you are representing.

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