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New Tax Rules for Child Earnings

Under the new tax rules, it is mandatory to disclose a child’s earnings in the Income Tax Return (ITR)

This applies to all children, including orphans. Income tax regulations have specific provisions for handling the earnings of minors, and in the case of orphans, there may be special considerations. Therefore, it is important for parents, guardians, or legal representatives to accurately report and disclose the child’s income in the ITR, as per the applicable tax laws.

If your son or daughter is not an adult and they earn through YouTube, social media or their talent, hobby or any investment, then it is necessary for parents to file income tax return on their earnings. Failure to disclose a child’s earnings in the Income Tax Return (ITR) can result in the Income Tax Department issuing a notice to the parents, guardians, or legal representatives. It is crucial to comply with the tax rules and accurately report the child’s income to avoid any potential legal consequences or penalties.

Are parents required to file Income Tax Returns (ITR) for their child’s property?

According to the rules of the Income Tax Department, the income of a minor child or the money received as a gift, property, investment etc. comes under the ambit of tax. Under Section 64 (1A) of the Income Tax Act, the money of children below the age of 18 years will be clubbed with the parent’s income tax return. This implies that the father will be required to file an Income Tax Return (ITR) for the income or property of the child.

Different rule on earning of disabled child

As per the Income Tax Department, if both the mother and father of a child file income tax returns, the child’s earnings or assets details will be combined with the ITR of the parent who earns a higher income. However, if the child is a victim of any kind of disability, his wealth will not be clubbed with the parents’ ITR under section 80U of the Income Tax Act. Instead, a separate Income Tax Return (ITR) will be filed for the child’s earnings or assets.

Income tax regulations pertaining to orphaned children

Under income tax regulations, even if an orphaned child below the age of 18 years possesses taxable assets, an income tax return must be filed. The services of a chartered accountant or an income tax firm can be sought to handle the filing process. The Income Tax Department has already made provisions for PAN cards for minor children, ensuring that orphaned children face no difficulties in filing their income tax returns.


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