Does my 16-year-old need to file taxes?

Last Updated at: April 06, 2020
310
Does my 16 year old need to file taxes_

Children were smart previously. Whereas, nowadays, children are double smart, which accounts for handling money, or choosing their career or even running a business. Minors (below the age of 18) earn. It is a parent’s/guardian’s responsibility to file taxes for their children, irrespective of the child’s age. Read further and get to know more information on it. Filing taxes is a citizen’s duty as it helps to uplift your social ranking.

What is the minimum age to file the Income Tax?

There is no minimum age criteria to file the income tax for a person. Even an infant can pay his/her income taxes based on a few exceptions. Income tax can be collected from the child’s income if it either earned money or unearned money. We call it as earned money when the children earn money by winning any contest/competition/tournament and so on. Salaried amount also comes under the earned money category. Wherein unearned money is that when the money is not directly earned by the minor i.e. for instance, if the amount is funded by a toddler’s grandparents to their grandchild for their future, etc. Income tax returns are calculated based on the minor children’s savings money or their investment. There are certain exceptions for the same.

A teenager working at odd jobs need not file income tax returns. There are many odd jobs available which isn’t taken into account. Such odd job workers can neglect the existence of income tax. 

As per section 10(32) of the Income-tax act, there is a provision for not including a teenager’s income with his/her parent if the amount earned by the minor is less than Rs.1500 / month. Therefore, the teenager can enjoy his income if he receives less than Rs.1500. However, this rule is also applicable to the amount transferred by a parent, uncle, grandparent, etc, it has to be less than Rs. 1500 a month, in order for it to be tax-free.

File Your income tax now

The income of the minor:

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 Public Provident Fund (PPF), a bank deposit, 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.

How can we club with the Income of a Minor?

The income of the minor can be clubbed with the parent’s income when the minor earns an amount of more than Rs.1500. According to Section 64(1A) of the income tax act, 1961, any income generated by the minor will be clubbed with the income of the parents (exceptions are there). 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. There are a few exemptions and restrictions to be followed while filing taxes in the name of the child who gets earned or unearned money.

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.

 

0

Does my 16-year-old need to file taxes?

310

Children were smart previously. Whereas, nowadays, children are double smart, which accounts for handling money, or choosing their career or even running a business. Minors (below the age of 18) earn. It is a parent’s/guardian’s responsibility to file taxes for their children, irrespective of the child’s age. Read further and get to know more information on it. Filing taxes is a citizen’s duty as it helps to uplift your social ranking.

What is the minimum age to file the Income Tax?

There is no minimum age criteria to file the income tax for a person. Even an infant can pay his/her income taxes based on a few exceptions. Income tax can be collected from the child’s income if it either earned money or unearned money. We call it as earned money when the children earn money by winning any contest/competition/tournament and so on. Salaried amount also comes under the earned money category. Wherein unearned money is that when the money is not directly earned by the minor i.e. for instance, if the amount is funded by a toddler’s grandparents to their grandchild for their future, etc. Income tax returns are calculated based on the minor children’s savings money or their investment. There are certain exceptions for the same.

A teenager working at odd jobs need not file income tax returns. There are many odd jobs available which isn’t taken into account. Such odd job workers can neglect the existence of income tax. 

As per section 10(32) of the Income-tax act, there is a provision for not including a teenager’s income with his/her parent if the amount earned by the minor is less than Rs.1500 / month. Therefore, the teenager can enjoy his income if he receives less than Rs.1500. However, this rule is also applicable to the amount transferred by a parent, uncle, grandparent, etc, it has to be less than Rs. 1500 a month, in order for it to be tax-free.

File Your income tax now

The income of the minor:

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 Public Provident Fund (PPF), a bank deposit, 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.

How can we club with the Income of a Minor?

The income of the minor can be clubbed with the parent’s income when the minor earns an amount of more than Rs.1500. According to Section 64(1A) of the income tax act, 1961, any income generated by the minor will be clubbed with the income of the parents (exceptions are there). 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. There are a few exemptions and restrictions to be followed while filing taxes in the name of the child who gets earned or unearned money.

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.

 

0

FAQs

No FAQs found

Add a Question


No Record Found
SHARE
Senior Executive - Content in Vakilsearch | Former TEDxSKCET Licensee | Content Marketing | Psychology | Engineering (IT) | Google Developers Group (GDG) co-organizer | WTM Ambassador