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Business News/ Money / Personal Finance/  Income tax return: Taxation rules to know while filing ITR of a minor child

Income tax return: There was a time when children were not met with many earning possibilities. Now a day, a good number of earning opportunities have emerged that offer part time job opportunity for a minor. But, when there is income there is liability of tax as well. According to tax and investment experts, a minor can have two types of incomes — earned income and unearned income. In both cases, income tax return (ITR) can be filed with a set of rules applicable for a minor earning individual.

Speaking on income tax return (ITR) filing for a minor earning individual, SEBI registered tax and investment expert Jitendra Solanki said, "If someone is earning, then the earning individual can file income tax return. In India, there is no age bar on ITR filing. But, for a minor earning individual, there can be two types of earning — money earned on its own and money earned from asset that can be categorized as un earned money." He said that different set of income tax rules will be applicable on earned and unearned money while filing ITR of a minor earning individual.

On ITR filing rules for a minor, Amit Gupta, MD at SAG Infotech — a SEBI registered tax solution provider company said, "When it comes to filing the tax, a minor can also file, if their earning amount is over 15,000 monthly. The salary can be made or not, it doesn’t make any difference."

On ITR filing rules on earned money and unearned money, Amit Gupta of SAG Infotech said, "When a child, who is minor can take part in any competition, TV show, or sports tournament and acquire the allocated prize in sum, or even that minor child has some part-time jobs or may having own business, then that could be called an earned money. If that minor child does not obtain money from their hard - work or actions, however, they earn money as a form of a gift from any event from their well-wishers like their relatives, grandparents, family friends, and thus how, if the income gained by them is categorized into unearned money."

"A child who is earning has to file their own income tax should have their age under 18. However, as long as the child is the responsibility of the parent, then their certain guardian can also file on behalf of the child. Let’s understand this if your child is still not counted under the majority and receives an income above Rs.1500 monthly. On account of this, you have to pay the taxes on behalf of them," said Amit Gupta of SAG Infotech.

Tax and investment experts listed out the following important facts in regard to ITR filing by a minor:

1] Terms like yearly income, pension fund, taxable income, medical insurance, and more similar to that can be elaborated to minors prior to filing their own tax returns;

2] Child’ under 18 of age should have their own tax return forms;

3] Children should secure a photocopy of their expenditure and incomes during each financial year in order to reference and for the aim to secure;

4] While putting the return form, it is important to write accurately the taxpayer's name along with the tax identification number;

5] It is crucial to keep in mind that tax records should be highly secured; and

6] The most dependable and possible process for filling the ITR for a minor is indulging the services of a tax specialist.

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Asit Manohar
Chief Content Producer at Live Mint Digital Team
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Updated: 25 Jun 2022, 10:50 AM IST
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