Age isn’t a reason with regard to Income Tax Return (ITR) filing. Relatively few citizens know that youngsters/minors are additionally expected to pay taxes and file returns, assuming they are making some income. Minors with income are responsible for paying taxes. A minor can have two sorts of income: earned and unearned; in both circumstances, ITR should be recorded, observing specific guidelines applicable to earning minors.
There is no base age limitation on recording ITR. Assuming it is unearned income (interest income, gifts, and so on.), then income will be clubbed in the parent’s income, and guardians will record the ITR. Be that as it may, assuming that it is procured pay, parents or legal guardians will document the ITR in the interest of minor youngsters as delegate assessees.
Be that as it may, there are a few circumstances and special cases. In excess of 4800 minors matured under 18 years documented their ITR in FY 2022–23 until January 31, 2023. Tax experts said that young people with a kind of revenue, including kid influencers, in India are supposed to pay taxes on their profit. Minors under the age of 18 who have an income as procured earned income or unearned income or do undertake transactions (depending on specific circumstances) have to pay taxes.
Clubbing of Income of a Minor Child under Section 64(1A)
Minors are not expected to document their own tax returns, and their pay is clubbed with the income of their parents or legal guardians. At the point when the kids bring in cash through their particular abilities, such as winning any challenge/rivalry/competition, and so forth. This cash additionally incorporates the compensation sum. At the point when the cash isn’t straightforwardly procured by the minor yet rather got as a type of gift from family members, grandparents, premium pay, pay from ventures made in their name by the guardians, and so on.
As per Section 64(1A) of the Income Tax Act, any amount a minor gets is included in the parent’s income. This is known as “clubbing income.” In this manner, the taxes on that pay will be paid the same way as the expense on the parent’s income.
It is mandatory, assuming the income is over the basic exemption limit. Minors with income are responsible for paying taxes. ITR should be recorded according to specific guidelines applicable to earning minors. There is no age limit for filing an ITR. Assuming it is unearned income (interest pay, gifts, and so on.), then income will be clubbed in the parent’s earnings, and guardians will record the ITR.
Also read | ITR filing: Check these advantages that you can get from filing income tax returns before deadline
Also read | How to update bank account and other details post ITR filing: A step-by-step guide
Latest Business News