Does a 15-year-old have to file taxes?

Last Updated at: February 21, 2020
290
Does a 15-year-old have to file taxes_

This post is written by Sanjay Muthukumar

As per the income tax act, 1961, every individual has to pay the tax irrespective of the age factor like a minor, major, senior citizen with few exceptions. In India, any individual, who has attained the age of 18 is considered as major and below the age of 18 will come under the category of the minor. Here the minor cannot file an income tax return independently, rather it is clubbed with the income of his parents. In this blog, get to know how to file taxes for your 15-year old minor.

Section 64(1) of the income tax act, 1961, states the term “minor” includes the stepchildren and adopted children.

Minor Income:

Basically, the income attained by a minor could be through an investment made under the name of the child by the parents in a mutual fund, a bank deposit, a Public Provident Fund (PPF), etc. Apart from that, the child can generate income through any manual work done by them and by exhibiting his own knowledge, skill, talent, experience. Ex: presently many kids working in the film industry, participating in the television competition shows, setting a Guinness record, etc.

Clubbing the Income of Minor:

Section 64(1A) of the income tax act, 1961, states that any income generated by the minor will be clubbed with the income of the parents. If both the parents are working then the minor income will be clubbed with one, who has a higher income. Here the clubbing will be done until the child is minor and once they attain the age of 18, their income will be assessed independently. When the investment was made under the name of the child, then the income generated from such investment is clubbed with the income of the parents.

Usually, when the investment was made under the name of the child, one of the parents should enclose his own KYC details, PAN number, bank account details, identity proof, etc. In case the parents are divorced, then filing of the income tax return of the child will fall under either of the parents, who have custody of the child. Similarly, if both the parents have died and the child is maintained by the guardian, then the child’s income will not be clubbed with the guardian income rather separate income tax return should be filed under the name of the child.

File taxes for your 15-year old

Exception on Clubbing:

  • Section 80(U) of the Income-tax Act, 1961, says if any child suffering 40% of the disability of hearing impairment, blindness, mental illness, etc are exempted from clubbing the income of a child with their parents.

  • If the income of the child is below Rs 1500, then it will not be clubbed with the parent’s income. Similarly, there was a small tax benefit under section 10(32) of the income tax act, the maximum of Rs 1500 will be exempted and not included in the parent’s income. But this provision is applicable to up to two minor children. For instance, if the yearly income of the child is Rs 5000, from this amount Rs 1500 will be exempted and the remaining Rs 3500 alone has to be paid.
  • The income generated by the child through the manual work done by him will not be clubbed with the income of parents, it will be completely exempted from tax liability.
  • Similarly, the income attained by the child by using their knowledge, skills, talent, and experience will be exempted and not clubbed with the income of the parents.
  • If the investment of the child was made under the schemes, which floats from time to time and the invested amount could be withdrawn only on attaining the majority of the child, then the income is not taxable and clubbed with the parent’s income throughout the term of his minority.

The minor can apply for a PAN card through representative assessee. This representative assessee should enclose his own details in the PAN application. Once the child has become a major, separate PAN application should be made out and they should independently file their income tax return.

 

0

Does a 15-year-old have to file taxes?

290

This post is written by Sanjay Muthukumar

As per the income tax act, 1961, every individual has to pay the tax irrespective of the age factor like a minor, major, senior citizen with few exceptions. In India, any individual, who has attained the age of 18 is considered as major and below the age of 18 will come under the category of the minor. Here the minor cannot file an income tax return independently, rather it is clubbed with the income of his parents. In this blog, get to know how to file taxes for your 15-year old minor.

Section 64(1) of the income tax act, 1961, states the term “minor” includes the stepchildren and adopted children.

Minor Income:

Basically, the income attained by a minor could be through an investment made under the name of the child by the parents in a mutual fund, a bank deposit, a Public Provident Fund (PPF), etc. Apart from that, the child can generate income through any manual work done by them and by exhibiting his own knowledge, skill, talent, experience. Ex: presently many kids working in the film industry, participating in the television competition shows, setting a Guinness record, etc.

Clubbing the Income of Minor:

Section 64(1A) of the income tax act, 1961, states that any income generated by the minor will be clubbed with the income of the parents. If both the parents are working then the minor income will be clubbed with one, who has a higher income. Here the clubbing will be done until the child is minor and once they attain the age of 18, their income will be assessed independently. When the investment was made under the name of the child, then the income generated from such investment is clubbed with the income of the parents.

Usually, when the investment was made under the name of the child, one of the parents should enclose his own KYC details, PAN number, bank account details, identity proof, etc. In case the parents are divorced, then filing of the income tax return of the child will fall under either of the parents, who have custody of the child. Similarly, if both the parents have died and the child is maintained by the guardian, then the child’s income will not be clubbed with the guardian income rather separate income tax return should be filed under the name of the child.

File taxes for your 15-year old

Exception on Clubbing:

  • Section 80(U) of the Income-tax Act, 1961, says if any child suffering 40% of the disability of hearing impairment, blindness, mental illness, etc are exempted from clubbing the income of a child with their parents.

  • If the income of the child is below Rs 1500, then it will not be clubbed with the parent’s income. Similarly, there was a small tax benefit under section 10(32) of the income tax act, the maximum of Rs 1500 will be exempted and not included in the parent’s income. But this provision is applicable to up to two minor children. For instance, if the yearly income of the child is Rs 5000, from this amount Rs 1500 will be exempted and the remaining Rs 3500 alone has to be paid.
  • The income generated by the child through the manual work done by him will not be clubbed with the income of parents, it will be completely exempted from tax liability.
  • Similarly, the income attained by the child by using their knowledge, skills, talent, and experience will be exempted and not clubbed with the income of the parents.
  • If the investment of the child was made under the schemes, which floats from time to time and the invested amount could be withdrawn only on attaining the majority of the child, then the income is not taxable and clubbed with the parent’s income throughout the term of his minority.

The minor can apply for a PAN card through representative assessee. This representative assessee should enclose his own details in the PAN application. Once the child has become a major, separate PAN application should be made out and they should independently file their income tax return.

 

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