Experts tell if a minor has to file income tax return

When it comes to filing Income Tax Return (ITR), age is no savior. Only taxpayers know that teens and children must also file tax returns and pay taxes if they receive any income. However, there are some restrictions and exceptions. More than 4800 juveniles below the age of 18 years filed ITR in FY 2022-23 till January 31, 2023. This article examines ITR filing and taxation rules for minors/children below 18 years of age.

According to tax experts, youth with a source of income, including those bearing children, are required to pay tax on their income just like any other worker.

Abhishek Soni, co-founder and CEO of fisdom company Tax2Win, points out that minors who are under 18 and hold money in the form of earned or unearned income or who engage in certain transactions (subject to certain restrictions) are liable to pay taxes. need to.

As per income tax rules, people below the age of 18 are considered minors and are subject to a different tax rate. TaxBuddy founder Sujit Bangar says minors don’t need to file their own tax returns, and their income is joint with that of their parents or legal guardians.

Children and minors may be liable to taxes in the following circumstances:

Earned Money: When children earn money by using their specific skills, such as winning first place in a competition or tournament. This money also includes the amount of salary.

Unearned Income: Amount that a minor receives as a gift from family members, grandparents, or through investments made by his or her parents in his or her name, and not the amount that he or she directly earns.

As per Section 64(1A) of the Income Tax Act, any amount received by the minor is to be included in the income of the parent. The term “income clubbing” refers to this. Therefore, the taxes to be paid on such income will be the same as the taxes on the parent’s income.

read all latest business news Here